Cover with image - GKN | Engineering That Moves The … · A320: neo Launch; Rate increase B737: MAX Launch; Rate increase MRJ/C-Series/MS21: Market entry ... EIS: 2017 Target Engine

GKN Aerospace Making things fly Marcus Bryson | CEO, GKN Aerospace and Land Systems

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GKN CAPITAL MARKETS DAY – 21 MAY 2013

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.

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GKN Aerospace

North America

GKN Aerospace

Europe

GKN Aerospace

Engine Systems

GKN Aerospace

$3.5 billion International Aerospace enterprise

35 sites, 12,000 people Marcus Bryson

CEO

GKN Aerospace

Aerospace North America

Aerospace Europe & Special Products Group

Aerospace Engine Systems (Volvo Aero)

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Lead in

chosen

markets

Excellent customer

relationships

Building stronger strategic relationships

New customers

Leverage

global

footprint

Globalise our business

Develop more business in Asia and Americas

Extend global value chain

Customer proximity

Technology

driving

margin

Deliver customer-

valued innovation

Innovation in key products

Process innovation

Partnering with customers on unique technologies

Operational

excellence

Safe, lean operations

Improve safety performance

Class leading cost, quality, delivery

Fully implement Lean in whole value chain

Values – walking the talk

GKN Aerospace – Making things fly

Sustain

above market

growth

Increasing share with current customers

Partnering on new programmes

Bringing new technologies to market

Successful acquisitions

17% CAGR achieved

2005-2013

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GKN Aerospace – Markets and customers

Customer Base

Market

Sector

Business

Mix

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http://www.baesystems.com/index.htm

http://www.northropgrumman.com/index.html

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Transparencies

and Protection

Systems

Special products 5% of Sales 2012*

Nacelle and

Pylon

Engine structures 42% of Sales 2012*

Engine Systems and Services Wing Fuselage

Note: * Engine Systems proforma 12 months of 2012

Aerostructures 53% of Sales 2012*

A380 Fixed Trailing Edge

A350XWB Rear Spar

A330 Flap Skins

B767 Winglet

J-UCAS Fuselage

CH53K Aft Fuselage

B787 Floor Grid

HondaJet Fuselage F35 Canopy

B787 Cabin Windows

V22 Fuel Tanks

B787 Anti-icing System

Full Engine MRO and support

Ariane 5 Exhaust nozzle

B787 Inner Core Cowl

A400M Engine Intake

B747-8 Exhaust

Engine structures Engine rotatives

GKN Aerospace – World class product portfolio

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30%

70%

Military

Commercial

Sales by market 2012 Customer sales E2013

Note: Engine Systems proforma 12 months of 2012

Well balanced portfolio

US 87%

Europe 13%

Military split

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Market outlook

Large commercial aircraft – record

order backlog (8,500 aircraft, >$1

trillion).

30,000 aircraft forecast to be delivered

2013 to 2032

Civil rotorcraft and large business jets

– markets strengthening

Worldwide defence spending remains

subject to budget cutbacks

Latest forecast growth rates –

2013 to 2018:

− Civil: 3% to 4% CAGR

− Military: Flat near term; Future uncertain

Notes: (2013$) Source: Teal Group

Aircraft production 2003 to 2022

World passenger traffic growth 2012 – 2032

Source: Airbus

c 25% military

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Market drivers bringing opportunities

Fuel price

Noise

legislation

Increasing

passenger travel

in emerging

markets

Higher fuel

efficiency

Better noise

attenuation

Increasing

demand for

aircraft

Engine

technology

changes –

hotter cores,

lighter fans

New materials –

composite

fans/cases,

titanium

replacing

composites

Airlines

renewing

fleets

sooner

GKN technology

composite fans and

cases for future large

aircraft

Strong position on

geared turbo-fan

Specialist titanium

engine structures for

next generation engines

Winglets and future

wings

Light weight composite

Increased new aircraft

sales

Drivers GKN opportunity Requirement Solution

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Civil market dynamics – Positive trend

A380/B747: Stable

A320: neo Launch; Rate increase B737: MAX Launch; Rate increase

MRJ/C-Series/MS21: Market entry

A350/B787: Production ramp-up

A330: Rate increase; 777 & upgrade

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Military market – On the right platforms

F-35 JSF Rate Readiness phase

F18 Super Hornet Rate Stable

F15 FMS / Saudi

C130J US multi-year

and FMS

V22 Multi-year

A400M Atlas Moving to production

Blackhawk US multi-year

and FMS

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Unmanned Carrier Launched

Surveillance & Strike (UCLASS) Long Range Strike Mission

Armed Aerial /Joint Multi-

Role Helicopter

NewGen Trainer

(T-X)

Heavy Lift Assault/Transport

Rotorcraft (CH-53K)

X-47B Unmanned Combat Air

System - Demonstrator

Next generation military platform opportunities

http://en.wikipedia.org/wiki/File:Sikorsky_S-97.jpg

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GKN Aerospace – well positioned for the future

Ship set values $m

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Next generation

composite processes

Advanced

metallic processes

Advanced process development

Transparencies

and coatings

Future product differentiation

Future wing

technologies

Advanced

fuselage

Nacelle, pylon

and exhaust

Engine

structures

Engine

rotatives

Ice protection

systems

Technology – Targeted innovation

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GKN technology is underpinning our future

New wing concepts

− High performance structural

concepts

− Laminar flow enabling technologies

− Morphing structures

Advanced materials and

processes

− Additive manufacture

− Advanced welding & fabrication

− Out-of-Autoclave curing

High-rate automation

− Robotic fibre placement

− Automated pick & place

− Rapid NDT

Creating a leadership position for the future

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GKN Aerospace Engine Systems Mike McCann | CEO

GKN Aerospace Engine Systems

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Military aircraft

engines

Sub-systems for

rocket engines

Engine

services

Components for

aircraft engines

and gas turbines

Formed through the acquisition of Volvo Aero, 1 October 2012

3rd largest Tier 1 aero-engine partner

OEM for the RM12 engine for the Gripen aircraft

European center of excellence for space turbines and nozzles

Small MRO facility for gas turbines and small engines


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Linköping, Sweden: Composites

(c.70)

Kongsberg, Norway: Manufacturing

(c.450)

Trollhättan, Sweden: HQ, engineering and

manufacturing

(c.2000)

Newington, CT(US): Manufacturing

(c.100)

Bangalore, India: Engineering

(c.30)

1

3

2

1

4

5

2 3

4

5

Banglalore (India) –

Product development

Connecticut (USA) – Large

components

Kongsberg

(Norway) –

Mechanical

production

Trollhattan

(Sweden)

– H.Q.

Linköping

(Sweden)

– Composites

Five sites in four countries

c.2600 employees

including c.400

engineers

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Leading designer and producer of aero engine structures

Well invested to secure new

engine programs: c.$460 million

over last four years

Positions on most major new Civil

Aerospace platforms

Risk & Revenue Sharing Partner

(RRSP) on many platforms;

provides Life of Program

participation

Significant aftermarket content

(c.30%) providing profitable long

term revenue streams

RRSP 59%

Military/ Space

8%

MRO 9%

Commercial LTA 24%

Engine Systems Sales E2013

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High quality customer base

Excellent complement to existing GKN Aerospace customer base

Partnerships with GE, Pratt & Whitney, Rolls Royce, Snecma and MTU

Engine Systems Sales E2013

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30%

18%

5% 10%

17%

20% Aerostructures

Engines

Nacelles

Avionics

Other systems

OEM's

13%

12%

8%

46%

3% 2%

2% 1% 1%

1% Avio

MTU

GKN

OEMs

ITP

IHI

KHI

MHI

Samsung

Tech Aero

Aerospace market Engine structure/module provider

marketshare

Source: CPMIL

Notes: Avio – Pending GE acquisition

Source: CPMIL

c.$160bn market c.$18bn market

GKN Aerospace Engine Systems market position

Number 3 independent engine structure/module provider

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Annual aero engine production value

3% to 4% aero engine market CAGR projected (2012 to 2021)

Single aisle and wide body jet engines c.70% of market value

Source: Teal Group

Aero engine market

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CFM56 (A320, B737)

GE90 (B777)

Trent XWB (A350)

V2500 (A320)

Trent 900 (A380)

PW1000 (C-Series,

MRJ)

CF6 (B747, B767,

A310)

RM12 (Gripen)

PW1100 (A320neo)

PW2000 (B757)

GP7000 (A380)

GEnx (B787,

B747-8)

Extensive portfolio of engine platforms

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Engine Systems revenue growth

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2012A 2013E 2014E 2015E 2016E 2017E 2018E

Sa

les

(S

EK

m)

Genx (B787, 747-8)

GTF & XWB (A320neo, C-Series, A350)

V2500 (A320)

Snecma (B737, A320)

CF6 (B767, A330)

PW2000 (B757, C-17)

LM2500 (IGT)

MTU PW4000 (B767, B777)

RM12 incl. export (Gripen)

ES

Other

Secure long-term revenue

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New program ramp-up

F-135

P&W Geared

Turbo Fan (GTF)

GEnx

Family

Trent

1000

Trent

XWB 84K F-135

Num

ber

of engin

es

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Pratt & Whitney Geared Turbo Fan (GTF)

PW1200G (Linked to PW1500G)

EIS: 2017 Target

Engine rate: 60/year

PW1500G (RRSP)

EIS: 2017 Target


PW1100G-JM (RRSP)

EIS: 2017 Target


PW1700G (PW1200G Derivative)

EIS: est. 2019


PW1900G (PW1500G Derivative)

EIS: est. 2017/2018


PW1400G-JM (PW1100G Derivative)

EIS:2017 Target


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GKN aero engine portfolio

Fan blades

Nacelles and Inlets

(Attached to Fan Casings)

Compressor

Disks and Blisks

Nozzle and Exhaust Structures

Compressor and

Turbine blades

LPT case

Combustor

Structure

Engine System/

Structure Design

Full Engine MRO

Product Lifecycle

Management (Gripen RM12)

FAN COMPRESSOR COMBUSTOR TURBINE/EXHAUST

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Composite fan blades Composite fan frame

New technologies

− Optimized fabrication

− Weld simulation

− Automated laser welding

− Metal deposition

Advanced machining and

automation capability

Titanium additive layer technology

in production

Light weight metallics

Turbine structures

Light weight composites

Leveraging complementary technologies

Compressor rotors

High performance structures

− Composite fan blades

(JV with Rolls-Royce)

− Composite fan cases

Advanced automated manufacturing

− Fibre placement and tape laying

Out of autoclave curing techniques

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Building a competitive business

Integration efforts on

or ahead of schedule

in all areas and

demonstrating good

initial results

On plan to achieve

3% to 4% synergy

commitment

Volvo Aero business

built largely on Risk

Revenue Sharing

Partnerships (RRSPs)

GKN strategy:

Reduce operating

costs

Win new

business in more

competitive

market

Establish more

balanced

business model

(RRSPs vs. fixed

price business)

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Engine Systems technology Martin Wänblom | VP Business Development and Programmes


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Personal perceptions about the acquisition

• Being part of a larger aerospace Company

• Understanding of the need for change

• Well received by customers

• Complementary business cultures

• Focus on future growth

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Technology driving growth – Engines

Strong presence on new platforms

Independent – work with all OEM’s

Technologies which bring value

GP7000

GEnx

P&W Geared Turbo Fan

Trent 1000

GE9x

(Future)

Trent

900

Trent XWB

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MRJ C-Series A320neo

Overview P&W GTF turbine exhaust cases

Platform approach – advanced fabrication solution for hot structures

Design methods and materials for high loads and high temperatures

Saves weight and improves design flexibility

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Design capability

OEM with complete engine system

lifecycle responsibility; RM12 for

the Gripen fighter

All relevant engineering disciplines

for full design and flight certification

responsibility

− Transferring engine thrust to

airframe

− Withstanding hot section

temperatures

European Centre of Excellence for

Ariane 5 space components for

Launcher

− Liquid oxygen and hydrogen

turbines

− Exhaust nozzles

https://teamplace.volvo.com/sites/swnedemo/Vulcain NE2 Demonstrator/Vulcain Family 1.jpg

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Process technologies

Additive manufacturing

Net shape technology development from

material supply through to qualification

Powder and wire fed laser and electron beam

processes

Advance metallic processes and materials

Laser welding

Linear friction welding

Advanced hole drilling and assembly

Hybrid machining

Advanced Ti process characterisation

High performance (cryogenic) machining

New materials development

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Lead in

chosen

markets

Engine structures strategically targeted business segment

GKN number 3 world-wide

Leverage

global

footprint

16 manufacturing sites operating in six countries

Range of industrial capability: lower cost (Mexico, SE US) to

higher technology

Technology

driving

margin

Full design and build capability throughout the Engine

Advanced technology: additive manufacture; high fibre

deposition rate

Operational

excellence

Bridging borders, facilities and technologies

Implementation of Lean principles throughout the Company

Sustain

above market

growth

Engine market projected to grow 3-4% CAGR over next

five years

GKN Engine Systems positioned to outperform market growth

Combined GKN engine business – bringing it all together

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GKN Aerospace summary Marcus Bryson | CEO, GKN Aerospace and GKN Land Systems

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Key drivers to medium term margin progression

• Volvo integration

• A350XWB – exit development phase, ramp-up

• B787 – production ramp-up

• F35 – production ramp-up

• Technology insertion in new platforms

• Cost base management

• Lean deployment throughout value chain

• Military budgets - C130J, C17

• Customer price pressure

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Capital allocation

Effective make or buy

Requires time to recover

Volvo Aero and new

programme investments

GKN technologies bringing

customer value

Balance between partnerships

and long-term agreements

Lean deployment throughout

value chain

Good position on existing

and new commercial

programmes

On the right military

platforms

Strong cashflow

GKN Aerospace summary

ROIC

>20%

Growth c.2%

above market

Margin range

11% to 13%

Business

performance

Documents

Cover with image - GKN | Engineering That Moves The … · A320: neo Launch; Rate increase B737: MAX Launch; Rate increase MRJ/C-Series/MS21: Market entry ... EIS: 2017 Target Engine