“2012 was another strong year for GKN with record profits in all four divisions,” said Nigel Stein, CEO, GKN. “The Group has continued to make good progress financially and in implementing our strategy to build a market leading global business, with excellent technology, a focus on operational excellence and above market growth.
GKN operates in global markets and has the capabilities needed to take advantage of the growth opportunities that those markets bring. With the benefit of a full year contribution from Volvo Aero, we expect 2013 to be a year of good progress for the group.”
GKN set out its plans for 2013. In automotive, external forecasts suggest that global light vehicle production should grow around 2% with increases in Asia and North America but Europe down. Against this background, GKN Driveline and GKN Powder Metallurgy are expected to show further improvement in 2013. However, the first half results will be impacted by lower market demand in Europe and, recognising that the market is unlikely to recover for some time, actions are being taken to reduce the fixed cost base, GKN said. Restructuring charges, primarily in the first quarter, are expected to be £16 million in GKN Driveline and £5 million in GKN Powder Metallurgy (incorporating Hoeganaes and GKN Sinter Metals).
In aerospace, commercial aircraft production is expected to continue to grow, as both Airbus and Boeing increase production, while US military aircraft demand is expected to decline. GKN Aerospace’s commercial aircraft sales growth is broadly expected to offset lower military sales and the ending of the £100 million supply chain contract with Airbus.
GKN Powder Metallurgy sales were £874 million compared to £845 million in 2011, an increase of 3%. Hoeganaes increased the number of tons of powder shipped by 9%, driven by strong automotive markets in North America. Organic sales for GKN Sinter Metals increased 10% in North America, due to strong automotive production, and 1% in Europe, where automotive production fell 5%. Strong growth was achieved in China and modest growth achieved in India and Brazil where vehicle markets were more volatile. Overall, GKN Powder Metallurgy reported a trading profit of £87 million (£72 million in 2011). During the year the section continued its strong product development and was awarded £120 million of annualised sales in new business. Its technology and quality was also recognised externally, receiving Design Excellence Awards for its variable valve timing rotor adapter assembly and a unitised one-way clutch module. Work began on a new manufacturing facility in Yizheng, China as GKN Powder Metallurgy continues to build its global footprint.
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