GKN PLC

Annual Report and Accounts
for the year ended 31 December 2007

 

GKN at a Glance

A leading engineering group operating in more than 30 countries and employing over 42,000 people in its subsidiary and joint venture companies. This is GKN.

Automotive

Principal Operations

  • GKN Driveline designs and manufactures automotive driveline components and systems for light vehicles, including driveshafts, geared components and torque management devices. The European IDS business provides a range of components to the passenger vehicle aftermarket, and repairs and replaces heavy duty propshafts.
  • The business, including joint ventures, operates from 49 locations in over 30 countries.
  • Other Automotive companies manufacture structural components, engine cylinder liners and substrates for catalytic converters for light vehicle and truck applications through subsidiaries and joint ventures in the UK, Germany, the US, China and India.

Major Markets

  • GKN Driveline is the global leader in the production of constant velocity jointed (CVJ) components for light vehicle drivelines. It produces some 113 million CVJs annually representing approximately 40% of global production. Its share of global demand for premium propshafts is around 20% and it is one of the world’s leading suppliers of traction control devices. The customer base is wide and includes all the world’s major motor manufacturing groups.
  • IDS has a wide range of aftermarket customers and Other Automotive sells mainly to European and US vehicle manufacturers and engine makers.

Constant velocity jointed sideshaft

Constant velocity jointed sideshaft

Share of 2007 Group Sales*

Share of 2007 Group Sales - £2,281m (55%)

Sales* by Region of Origin and Employees

Sales* by Region of Origin and Employees

Powder Metallurgy

Principal Operations

  • GKN Sinter Metals uses powdered metals to manufacture precision automotive components for engines, transmissions, and body and chassis applications. It also produces a range of components for industrial and consumer applications, including power tools, bearings, white goods and garden equipment. The business operates from 30 locations in Western Europe, North and South America, India, China and South Africa.
  • Hoeganaes produces metal powders, largely steel based, used in the manufacture of sintered components. Manufacturing takes place in North America, where it is the largest producer of ferrous metal powder, with a growing presence in Eastern Europe.

Major Markets

  • GKN Sinter Metals is the world’s largest manufacturer of sintered components with an estimated 15% global market share, almost twice that of its nearest competitor. Approximately 80% of its sales are to automotive customers, with around 35% either directly or indirectly to the North American operations of General Motors, Ford and Chrysler and the balance to a wide range of European automotive and other industrial customers.
  • Hoeganaes has an estimated 50% share of the metal powder market in North America. Some 50% of its sales are to our own sintering business with the balance to other US, European and Asian customers.

Variable valve timing rotor

Variable valve timing rotor

Share of 2007 Group Sales*

Share of 2007 Group Sales - £602m (15%)

Sales* by Region of Origin and Employees

Sales* by Region of Origin and Employees

OffHighway

Principal Operations

  • GKN OffHighway designs, manufactures and distributes a wide range of products and systems for the agricultural, construction and mining, and industrial machinery markets. The business supplies, on a global basis, a unique portfolio of products for off-highway vehicles including agricultural and torsion axles, wheels, power take-off shafts, gearboxes and tractor attachment systems.
  • A service and distribution business supplies GKN’s and other manufacturers’ products to aftermarket wholesalers and distributors, principally within Europe.
  • The business operates from 24 locations in 13 countries across the Americas, Europe and Asia.

Major Markets

  • The major markets in which GKN OffHighway operates are global agricultural (63% of sales), construction and mining equipment (23%) and industrial equipment (14%). GKN OffHighway is the leading global supplier of off-highway wheels, agricultural power take-off shafts, and high speed shafts for construction equipment.
  • A first tier supplier to the world’s leading manufacturers of agricultural and construction and mining equipment, 50% of its sales are to 15 global customers including John Deere, Caterpillar, Case New Holland, CLAAS and AGCO. The remaining sales are to some 3,000 independent customers.

Off-highway driveshaft

Off-highway driveshaft

Share of 2007 Group Sales*

Share of 2007 Group Sales - £419m (10%)

Sales* by Region of Origin and Employees

Sales* by Region of Origin and Employees

Aerospace

Principal Operations

  • GKN Aerospace is a leading supplier of airframe and engine structures, components, assemblies and engineering services to aircraft prime contractors. It offers design and manufacturing capabilities in aerostructures (fuselage, wing and flight control surface assemblies and components), propulsion systems (engine and nacelle components and assemblies), and special products (including transparencies and protection systems).
  • The business operates through 20 manufacturing facilities around the world, mainly in North America and Europe, assisted by a network of design and support facilities.

Major Markets

  • GKN Aerospace serves all major airframe and engine manufacturers, with particular emphasis on composite technologies and lightweight highly stressed metallic components. It is a leader in the design and manufacture of advanced composites, transparencies and complex metal structures.
  • Approximately 58% of sales are to the defence market and 42% to the civil market. The top three customers, which account for some 50% of sales, are Boeing, United Technologies and EADS. 15% of total sales are derived from aftermarket services.

Blended winglet

Blended winglet

Share of 2007 Group Sales*

Share of 2007 Group Sales - £820m (20%)

Sales* by Region of Origin and Employees

Sales* by Region of Origin and Employees

* Including share of joint ventures.

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