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Berenberg European Conference, Tarrytown, USA An introduction to GKN 24 May 2017 | Guy Stainer | Investor Relations Director

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Disclaimer

Cautionary statement

This presentation contains forward looking statements which are made in good faith based on the information

available at 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.

BERENBERG EUROPEAN CONFERENCE,USA – 24 MAY 2017

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Our strategy

Creating long-term shareholder

value

Three strong

divisions

Lead in chosen markets

Leverage global footprint

Technology driving margin

Operational excellence

Increasing cash flow,

EPS and dividends

BUSINESS

PERFORMANCE

Growth target:

Above market

Group target:

8-10%

Target: 20%

Sustain above

market growth

Cash Flow

Growth

ROIC Margin

Five strategic objectives


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Leading market positions

Additive

Manufacture

Emerging

Driveshafts

Global

#1

AWD

Global

#1

eDrive

Global

#1

PM Components

Global

#1

Powders

Global

#2

Additive

manufacture (with GKN Aerospace)

EMERGING

Aerostructures

Global

#2

Engine Systems

Global

#2

Electrical Wiring

Global

#3


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Aerostructures £1,706m

50%

Engines £1,239m

36%

Special products £311m

9%

Services, £168m

5%

GKN Aerospace Sales by product 2016

Airbus 19%

Boeing 12%

UTC 10%

GE 9%

Lockheed 7%

Snecma 4% Rolls-Royce 3%

Gulfstream 3%

Honeywell 3%

Others 30%

GKN Aerospace Sales by customer 2016

74% Commercial

26% Military

GKN Aerospace Sales by market 2016

GKN Aerospace – at a glance

17,950 employees

55 manufacturing locations

14 countries

GKN Aerospace is a leading global tier one supplier of airframe and

engine structures, landing gear, electrical interconnection systems,

transparencies and aftermarket services. It supplies products and

services to a wide range of commercial and military aircraft and

engine prime contractors and other tier one suppliers. Sales: £3.42bn

Trading Profit: £339m

Trading Margin: 9.9%

ROIC: 14.6%


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GKN Aerospace portfolio

Reven

ue p

er

Air

cra

ft

Declining Stable Growing

A320

B737MAX

A350 B787

A330

A380

Black Hawk

A400M

C130J

JSF

CH53-K

G650

HTF7000

F/A-18

Commercial

Military

$6-9 million

$3-6 million

$0-3 million

C-Series


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93.0 94.8

96.1

98.6

101.4 103.2

104.9

2016 2017 2018 2019 2020 2021 2022

Mil

lio

ns

of

Veh

icle

s

CVJ Systems 61%

AWD & eDrive Systems

39%

GKN Driveline Sales by product 2016

GKN Driveline – at a glance

28,100 employees

49 manufacturing locations

23 countries

GKN Driveline is the world’s leading supplier of automotive

driveline systems and solutions. As a global business

serving the leading vehicle manufacturers, it develops,

builds and supplies an extensive range of automotive

driveline products and systems – for use in everything from

the smallest low-cost car to the most sophisticated premium

vehicle demanding complex driving dynamics.

Fiat Chrysler, 13%

VW Group, 12%

Ford Group, 11%

GM Group, 10% Renault-Nissan,

9%

Toyota Group, 7%

Tata, 5%

BMW, 4%

Geely Group, 4%

Other, 25%

GKN Driveline Sales by customer 2016

Europe 37%

Americas 36%

Rest of World 27%

GKN Driveline Sales by region 2016

Source: IHS Automotive, February 2016

Sales: £4.22bn



ROIC: 19.2%


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GKN Driveline - a complete driveline solution

Leadership in all major product lines


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BMW 2 series Active Tourer

2002

Nissan Cube

Peugeot 3008 HY4

Porsche 918 eSpyder BMW i8

Unmatched real-world experience in eDrive

History of delivering hybrid electric systems

300,000 vehicles on the road today, using GKN eDrive technology – many more to come.

Volvo XC90

2016

FIAT 500e

2012

Mitsubishi Outlander

BMW X1


10

Sinter Americas 42%

Sinter Europe 34%

Sinter Rest of world 9%

Hoeganaes 15%

GKN Powder Metallurgy Sales by region 2016

Ford 9%

GM 8%

Schaeffler 5%

Fiat Chrysler 4%

Hilite 4%

ZF Group 4%

Linamar 3%

Borg Warner 3%

Bosch 2%

Other 58%

GKN Powder Metallurgy Sales by customer 2016

GKN Powder Metallurgy – at a glance

6,900 employees

33 locations

9 countries

GKN Powder Metallurgy comprises GKN Sinter Metals and Hoeganaes. GKN

Sinter Metals is the world’s leading manufacturer of precision automotive sintered

components as well as components for industrial and consumer

applications. Hoeganaes is one of the world’s leading manufacturers of metal

powder, the essential raw material for powder metallurgy.

>80% of sales to Automotive Sector

Global PM Market Share

GKN PM 18%

Sumitomo 9%

Hitachi PM 6%

Fine Sinter 5%

Miba 5%

Porite 4% PMG 4%

Metaldyne 4%

Schunk 2% Ames 2%

Stackpole 2%

Others 39%

Sinter Metals

Components

Hoeganaes

Powder

GKN Powder

Metallurgy

Sales: £1.03bn



ROIC: 21.0%


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GKN Powder Metallurgy - Automotive trends driving Design for PM

Energy efficiency Renewable energy Reduced Emissions

VVT

(CAM PHASING)

START/STOP

EPS (ELECTRIC POWER

STEERING)

ALUMINIUM CARRIER

7+ SPEED TRANSMISSIONS

TRANSMISSION

GEARS

VARIABLE VANE

PUMPS

Fuel efficiency Electrification Lightweight


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Results summary

2016

£m

2015

£m

Change

%

Sales 9,414 7,689 22

Trading profit 773 679 14

Trading margin (%) 8.2 8.8 (60) bps

Profit before tax 678 603 12

Earnings per share (p) 31.0 27.8 12

Dividend per share (p) 8.85 8.7 2

2% organic growth

Margin excluding restructuring of 8.6%

Final dividend 5.9p

£39m 2016 restructuring programme

Tax rate 24%


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Sharpening focus – on three divisions

Leader in robust and growing end markets

Geographically diversified

Key technology partner

Operational excellence

Q1 trading update showed good progress with organic

sales growth and margin improvement

In summary

GKN – a great heritage with an exciting future


14

Appendices


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Global engineering group

Sales of £9.4 billion in 2016

58,000 people in more than 30 countries

Tier 1 Supplier to the major Automotive and Aerospace OE manufacturers

2016 - Sales by division

Driveline (45%)

£4,216m

Aerospace (36%)

£3,423m

Land Systems (8%)

£704m

Other (0%)

£39m

GKN Aerospace

A leading first tier

supplier to the global

aerospace industry.

GKN Driveline

The world leading

supplier of automotive

driveline systems

and solutions.

GKN Powder

Metallurgy

One of the world’s

largest manufacturers

of metal powder and

sintered components.

All group financial data in this document relates to 2016 unless otherwise stated. Figures are presented on a management basis.

Powder Metallurgy

(11%)

£1,032m

2016 – Trading Profit by division

Driveline (40%)

£323m

Aerospace (43%)

£339m

Land Systems (2%)

£18m

Other (0%)

£4m loss

Powder Metallurgy

(15%)

£118m

GKN Land Systems ceased to exist from 1 January

2017, following sale of Stromag in December 2016

− Shafts and Services => GKN Driveline

− Wheels and Structures => Other businesses

Excludes £21m corporate costs


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Strong undercurrents driving our markets

…increasingly urban and Asian …and ageing

Environmental

New technologies …additive manufacture …and digital manufacturing

…fuel efficiency/lightweight …and electrification/automation

Rising population


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GKN Aerospace technology roadmap

Wing of the future

Thermoplastic materials

Structures

Composite engine

components

Blisks

Engine systems

Electric aircraft initiative

Electrical systems

Developing additive manufacture components in engines and structures


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GKN Aerospace - summary

Key growth drivers

Commercial (74% of sales)

− Strong position on re-engined programmes with increasing build rates - A320neo, Boeing 737

MAX

− New programmes ramping up production - A350, C-Series

− Wide-body production reducing Boeing 777, A380

− Engine investment continues - P&W Geared Turbo Fan, Rolls-Royce XWB

Military (26% of sales)

− Decline of older military programmes (F/A-18, F/A-15, Black Hawk) being offset by new

programmes (F-35)

Good technology – aim to win new positions on growth programmes

F-35 Joint Strike Fighter

Boeing 737 MAX

Airbus A350


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GKN Driveline technology roadmap

Optimised in-line AWD

Modular design

All-wheel drive

eAxle

eTransmission

eDrive

VL3 System

CVJ

Continuous development of software and integration capabilities


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GKN Driveline – summary

Driveshafts

Clear #1 – 42% share

Unrivalled global footprint and

increasing global platforms

Maintaining technical leadership

Winning key business

All-Wheel Drive

Leading position

Increased content per vehicle and

broadening customer base

Moving from components to

designing full systems

Increasingly includes software

eDrive

Electric AWD (eAxle) offers further

opportunity for additional content

per vehicle

Global eAxle leadership

Developing eDrive technology

and footprint

Advanced VL3

CVJ is winning

new business

and is a PACE

Award finalist

Volvo XC90

with GKN

eAxle

Source: IHS

Driveline for the

FIAT 500X /

Jeep Renegade

is designed and

built by GKN

CVJ =100 AWD = 800 eDrive = 1250 - 2000

Typical content per vehicle - index

GKN Driveline Growth vs Market

6.6%

3.9%

1.9%

1.4%

GKN Driveline SalesGrowth (2012-2016)

Market AverageGrowth (2012-2016)

Market GrowthForecast (2017)

Market GrowthForecast (2018)


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GKN Powder Metallurgy technology roadmap

Rolled gears

Off-tool high

precision

Complex products

Advanced powders

Design for additive

manufacture

New markets Strong technology

System design capabilities

Modelling and simulation

eMotor

products

Advanced tools and presses plus strong process development


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