15th Oct 2009 07:00
GKN plc
Interim Management Statement
15 October 2009
GKN plc, the global engineering business that serves the automotive, aerospace and off-highway markets, today issues an Interim Management Statement covering the period since 1 July 2009.
|
2009 |
2008 |
||||||||
|
Management performance |
Q1 |
Q2 |
H1 |
Q3 |
9m YTD |
H1 |
Q3 |
9m YTD |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
||
|
Sales |
1,079 |
1,095 |
2,174 |
1,103 |
3,277 |
2,402 |
1,143 |
3,545 |
|
|
Trading Profit |
(13) |
36 |
23 |
51 |
74 |
161 |
46 |
207 |
|
|
Profit/(loss) before tax |
(29) |
21 |
(8) |
36 |
28 |
132 |
36 |
168 |
|
Overview
Group management sales in the three months ended 30 September 2009 totalled £1,103 million, a 3 per cent. decrease over the comparable period in 2008. Currency translation and the Filton acquisition provided a combined benefit of £203 million. Excluding Filton, Group sales on a constant currency basis reduced by 19 per cent.
In the three months ended 30 September 2009, the Group achieved a trading profit on a management basis of £51 million and a management profit before taxation of £36 million. Net Rights Issue proceeds of £403 million and positive free cash flow in the third quarter resulted in net debt at 30 September 2009 of £374 million.
GKN Markets and Performance
Automotive (including Powder Metallurgy)
Government incentive programmes have provided strong support for light vehicle sales and led to improved production, most notably for smaller vehicles. Production of larger vehicles has also increased as inventory levels have stabilised. GKN's third quarter sales improved by 10 per cent over the second quarter, with a particularly strong September.
GKN's Automotive sales in the three months to 30 September 2009 were £677 million, down 19 per cent. on a constant currency basis compared to the equivalent period in 2008. Trading profit for the third quarter was £17 million.
Aerospace
GKN Aerospace continues to perform well, with military aircraft production remaining solid and no further reduction in civil aircraft schedules. Sales for the three months to 30 September 2009 were £361 million with trading profit of £43 million.
OffHighway
Off-highway markets continued to decline in the third quarter. GKN OffHighway's sales in the period were £65 million, down 55 per cent. on a constant currency basis compared to the equivalent period in 2008. Overall, the division incurred a trading loss of £6 million in the three month period.
Restructuring
Good progress continues to be made with the restructuring programme and the benefits are clearly showing through in operating performance. Short-time working programmes continue to reduce.
Outlook
Considerable uncertainty remains in a number of GKN's end markets.
In Automotive, the full impact on vehicle production of the phasing out of a number of incentive schemes in Europe and North America will not become evident for a number of months.
In Aerospace, sales for the balance of the year should remain robust.
Off-highway markets are expected to remain weak through the balance of the year, although a more stable operating environment is expected in the fourth quarter.
Overall, Group sales in the fourth quarter are currently expected to be similar to those achieved in the third quarter.
Board Changes
Mike Turner, CBE was appointed as a non-executive Director with effect from 1 September 2009.
Final Results Announcement
The Group intends to issue a pre-close trading update in December 2009, ahead of its full year results announcement on 25 February 2010.
Note: Financial information set out in this announcement, unless otherwise stated, is presented on a management basis which aggregates the sales and trading profit, as applicable, of subsidiaries and the Group's proportionate share of joint ventures. Management profit or loss before tax is Group profit or loss before tax adjusted to exclude restructuring and impairment charges, profits and losses on sale or closures of businesses, amortisation of non-operating intangible assets arising on business combinations, change in value of derivative and other financial instruments and other net financing charges. These figures better reflect performance of continuing businesses.
For further information:
Guy Stainer
Director, Investor Relations and External Communications
T: +44 (0)207 463 2382
M: +44 (0)7739 778 187
Andrew Lorenz
Financial Dynamics
T: +44 (0)20 7269 7113
M: +44 (0)7775 641 807
Cautionary Statement
This press release 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.
Notes to Editors
GKN plc is a global engineering business serving mainly the automotive, aerospace and off-highway markets. It has operations in more than 30 countries, around 39,000 employees in subsidiaries and joint ventures and had sales of £4.4 billion in the year ended 31 December 2008. GKN plc is listed on the London Stock Exchange (LSE: GKN).
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