Divisional performance against Group strategy
Strategic objective Progress
• Global leader in sintered components. Leading in our • World’s number two manufacturer of metal powder. chosen markets • £185 million of new business won. • Relocated to new production facilities in China. Leveraging • Powder venture in China agreed, pending regulatory approval. a strong global presence
Differentiating ourselves through technology Driving operational excellence
• Increased success for ‘Design for Powder Metallurgy’ through unique combination of materials and process. • Continued to develop technically enhanced powders and titanium powder for additive manufacturing. • Leveraged technology partnership to accelerate use of hydrogen storage. • Continued to roll out advanced compaction presses in the US to improve manufacturing efficiency and capability. • Development of ‘My Quality’ programme and further implementation of digital data gathering.
Sustaining above market growth
Organic sales were £2 million higher, after the £23 million pass through to customers of lower steel prices and other surcharges. There was an adverse £5 million (1%) impact from currency translation and there was a £7 million decline as a result of the disposal of GKN Sinter Argentina. Underlying growth (before raw material pass through) was 3%, ahead of global light vehicle production which was up 1%. Underlying sales growth was achieved in North America, China and Europe but sales in Brazil fell sharply due to weaker automotive and industrial markets. The organic increase in profit was £6 million and there was a £2 million gain from currency translation. The divisional trading margin was 12.0% (2014: 11.0%), reflecting the move towards higher value ‘design for powder metallurgy’ parts and a small margin benefit from lower raw material prices passed through to customers.
During the year, GKN Powder Metallurgy achieved a number of important milestones, which included: • winning around £185 million of annualised sales in new and replacement business • its position in China being further enhanced by forming a new venture to produce metal powders, subject to approvals • development of new technically enhanced powders continuing with a new research titanium atomiser being commissioned at the Powder Innovation Centre, in the US and the attainment of AS9100 Certification for the AncorTi™ range of gas atomised titanium powders for aerospace applications.
See pages 6 and 7 for more information on our strategic framework
GKN plc Annual Report and Accounts 2015