Powder Metallurgy sales were up 48%, with a 7.1% trading margin, while all sales were up 22% (£975 million) to £5.4 billion. The trading profit was £411 million, up £255 million, and trading margin of 7.6%. “GKN has continued to make strong progress in financial performance and in building the future of our global market-leading businesses,” said Sir Kevin Smith, Chief Executive of GKN plc. “The trading environment has seen an improving trend for GKN’s Driveline, Powder Metallurgy and Land Systems businesses. The aerospace market has remained subdued although civil aerospace is now moving into a strong growth phase with volume increases on existing platforms and new aircraft moving into production.”The company suggests that global light vehicle production should reach just over 78 million vehicles in 2011, an increase of 5%, with the strongest growth in China and India and continuing market recovery in North America. Production in Western Europe is expected to be broadly flat.In aerospace, US military aircraft market demand is expected to show a small reduction as the rundown of the F-22 programme and a decrease on the C-17 are partially offset by increases on other programmes. Against this background, Driveline and Powder Metallurgy are expected to show further good improvement in 2011, while aerospace sales are expected to remain the same.
The purchase of key raw material supplies has been largely contracted for the whole of 2011 for Aerospace and Driveline against current expectations of demand at similar price levels to 2010. The scrap steel surcharge, which impacts Powder Metallurgy and Driveline, has increased sharply in the early part of the year and both divisions have mechanisms in place which should recover about 80% of any increase over the course of the year, GKN says.
