Trading Statement

NEWS RELEASE GKN plc Trading update 6 May 2015 GKN plc, the global engineering business that serves the aerospace, automotiveand land systems markets, today issues a trading update for the period since1 January up until 5 May 2015. Group Results The Group's principal markets have performed in line with the expectations setout in our February results announcement. Our Automotive businesses continue tooutperform the market and our Aerospace business has traded in line with ourexpectations. Land Systems' principal market remains tough. Management sales for the three months ended 31 March 2015 were £1,943 million(2014: £1,915 million). This represented a 1% organic increase, with beneficialcurrency translation being broadly offset by disposals. The strengthening of the US$ versus £ sterling has had a positive impact onthese results, especially in Aerospace but the weakening of the Euro has had anegative impact, particularly in Driveline and Land Systems. Group trading margin is slightly ahead of last year benefitting from currency,in spite of a decline in Land Systems. Operating cash generation is lower than the equivalent period last year becauseof the timing of investment programmes to support growth. Divisional Performance GKN Aerospace GKN Aerospace sales in the first quarter of £589 million (2014: £546 million)were in line with expectations being slightly up on an organic basis. Theplanned ramp-up of production of new aircraft is helping commercial sales whilemilitary demand is marginally down. Recently announced cuts in production ratesof the A330 will be a headwind in the second half of the year. Margins areahead of the same period last year. GKN Driveline GKN Driveline delivered a good first quarter result with sales increasing 3% to£912 million (2014: £885 million). Organic sales increased 4%, against a verystrong comparator period in 2014 and global industry production rates only 1%higher over the period. Good organic growth was achieved in Europe and Chinawhile Brazil and Japan were weak. Our North American sales were flat due to thegreater weighting towards cars/SUVs and the lower content in the pick-up trucksegment, which has been strong. GKN Driveline margins were similar to lastyear's equivalent period although pricing remains a downward pressure. GKN Powder Metallurgy GKN Powder Metallurgy produced a strong first quarter, with sales up to £244million (2014: £237 million). Organic sales growth was 3%, despite the negativeimpact on powder sales of a direct pass through of lower raw material prices.Powder Metallurgy margins were a little higher than those achieved over thecomparable period last year. During the period, operations in Argentina weresold. GKN Land Systems GKN Land Systems sales declined to £187 million (2014: £217 million) includinga 10% organic decline due to continued demand weakness for agriculturalequipment and a 4% fall due to adverse currency translation. The Agriculturalmarket, particularly in North America, remains soft and we do not anticipateany improvement in this market in 2015. We are mid-way through the previouslyannounced restructuring programme. Other businesses Sales in the quarter for GKN's other businesses fell to £11 million (2014: £30million) reflecting the disposal in 2014 of the Group's share of the Emitecjoint venture. Summary Nigel Stein, Chief Executive, GKN plc, commented: "Our organic performance overall in the first quarter was in line with ourexpectations, with growth above our markets in GKN Driveline and GKN PowderMetallurgy, slight growth in GKN Aerospace, while GKN Land Systems was weaker.Looking ahead, we continue to expect 2015 to be another year of growth." Half year results announcement The first half results will be announced on 28 July 2015. Trading update call There will be a call for analysts and investors at 08:30am today (6 May).Dial in details are: Direct dial: +44 (0) 203 139 4830 UK toll-free: 0808 237 0030 Conference ID: 86868160# Participants dialling into the call from outside the UK can find a local numberin the following file: http://wpc.1726.planetstream.net/001726/FEL_Events_International_Access_List.pdf A replay of the conference call will be available for 30 days at the followingnumbers (or will be available thereafter on the Group's website): Direct dial: +44 (0) 203 426 2807 UK toll-free: 0808 237 0026 Conference ID: 656973# Analyst Dinner We will hold an informal dinner this evening with sell side analysts with afocus on GKN Powder Metallurgy. No further trading update will be given.Presentation materials will be available afterwards from www.gkn.com. Notes Financial information set out in this announcement, unless otherwise stated, ispresented on a management basis which aggregates the sales and trading profitof subsidiaries (excluding certain subsidiary businesses sold and closed) withthe Group's share of the sales and trading profit of joint ventures. References to trading margins are to trading profit expressed as a percentageof sales. These figures better reflect performance of continuing businesses.Where appropriate, reference is made to organic results which exclude theimpact of acquisitions/divestments as well as currency translation on theresults of overseas operations. Further information: Analysts/Investors: Guy StainerInvestor Relations DirectorGKN plc T: +44 (0)207 463 2382M: +44 (0)7739 778187E: [email protected] Media: Chris FoxGroup Communications DirectorGKN plc T: +44 (0)1527 533238M: +44 (0)7920 540051E: [email protected] Cautionary Statement This announcement contains forward looking statements which are made in goodfaith based on the information available at the time of its approval. It isbelieved that the expectations reflected in these statements are reasonable butthey may be affected by a number of risks and uncertainties that are inherentin any forward looking statementwhich could cause actual results to differmaterially from those currently anticipated. Nothing in this document should beregarded as a profits forecast. Notes to Editors GKN plc is a global engineering business serving the aerospace, automotive andland systems markets. It has operations in more than 30 countries, around51,000 employees in subsidiaries and joint ventures and had sales of £7.5billion in the year ended 31 December 2014. GKN plc is listed on the LondonStock Exchange (LSE: GKN).