5.driveline Final

GKN Driveline
Business overview and strategy

Steve Markevich | CEO GKN Driveline
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.
2 GKN CAPITAL MARKETS DAY 21 MAY 2013
GKN Driveline An excellent global footprint

GKN Driveline end-2012 3.24 billion Sales c.22,000 Employees 45 Plants 22 Countries
United States
U.K. France Spain Italy Slovenia Turkey
Sweden Poland Germany
South Korea China India Taiwan Japan
Mexico Manufacturing plant Colombia Joint Venture Corporate office / Engineering centre
Thailand
Singapore
Malaysia
Brazil
Australia
GKN Driveline performing as the market leader Delivering on a commitment

Clear and compelling strategy Integrated Getrag AWD into Driveline
Technology roadmap aligned to market needs

Global customers with strategic relationships Selective wins with pricing discipline
Prioritised investments
Integrated global network
people, process, systems, standards, etc.
Creating distinct competitive advantage
Sales growth above market

3,500 3,000 2,500 2,000 1,500 1,000 500 0 2007 2008 2009 2010 2011 2012
Acquisition of Getrag Driveline in Q4, 2011
180 160 140 120 100 80 60 40 20 0 Global light vehicle production index (2007 = 100)
Driveline sales m
Organic growth of c.5% above market driven by:

Leading positions and share gains in growth markets Global customer mix and premium brands Increasing share and content of AWD
Unrivalled driveline product and systems capability

Market leader in CVJ sideshafts and AWD systems Future hybrid and electric drivetrains
CVJ Systems
All-Wheel Drive
61% of Sales
39% of Sales
Leading positions in our core product segments

CVJ Sideshafts
GKN NTN Nexteer Hyundai WIA Wanxiang/Neapco
Propshafts
GKN Dana IFA Rotorion American Axle JTEKT
AWD PTU/FDU
GKN Magna Dymos Hyundai Wia American Axle
AWD Couplings
JTEKT BorgWarner GKN Honda
Performance Diffs
GKN Eaton American Axle Dana
Electric Axle*
GKN Magna American Axle BorgWarner
Magna (inc. WIA JV)
JTEKT
Linamar
*Emerging product segment
Source: GKN estimated rankings on 2013 basis; excludes in-house.
Balanced global footprint with excellent regional balance

Sales by region of origin 2012 Sales growth by region
Europe Customer mix Export demand AWD acquisition Asia 29% Europe 37% Americas NA market strength CVJ share gain AWD acquisition Brazil slowed by vehicle imports
919
1105
1196
2010
2011
2012
1115
668
815
2010
2011
2012
Americas 34%
Asia Strong growth in China Japan weaker m
846
875
925
2010
2011
2012
Operational excellence on a global scale

Global best practices
Simplifying global supply chains

Mexico
Relentless focus on waste reduction World class quality disciplines

Defect parts per million (ppm)
19 14 10
2009
7
2010
6
2011
5
2012
2007
2008
China
Expanding capability for high growth markets

CVJ Key investments
Mexico
Sideshaft capacity expansion and new forge
Poland
Sideshaft capacity expansion.
Add propshafts
Russia
Under review.
China
AWD Investment supports global growth

United States
Propshaft capacity expansion. New 4WD FDU supply.
India
Ramp-up new Pune plant and expand Oragadam.
Thailand
Add propshafts and 4WD FDUs
Italy
AWD and eDrive capacity expansion
Sweden
AWD capacity expansion
China
Extension of SDS JV to AWD and eDrive products
Full driveline capability in China

SDS JV now includes AWD and eDrive Systems GKN Torque Shanghai now part of SDS
Participating in rapidly growing SUV and AWD market

Expanding local engineering capability
GKN Driveline sales

(China with SDS at JV share)
297
209
232
8 manufacturing plants 3,800 people

GKN/SDS locations
OEM plant locations
2010
2011
2012
Well positioned with global customers and platforms

Sales by customer 2012
VW Group, 15%
RenaultNissan, 11% GM, 10%
Others, 20%
Volvo Car Geely, 4% JLR-TATA, 5% Mitsubishi, 5% BMW, 4% Toyota, 6%
FIAT Ford, 10% Chrysler, 10%
Footprint aligned with customer needs Value of global reach and scale Common platforms with optimised designs
Strategic relationships with early involvement

Global account management and program launch capability
Mega-platforms an opportunity to accelerate global growth

The leading component, solutions and systems supplier

2015 2020
Components
Selective growth (BRIC) and disciplined with market opportunities Global customer and manufacturing footprint
Solutions
Greater deployment of advanced technology products Fuel-efficient, light-weight, high performance
Systems
Strategic development partner Next generation AWD systems and electric drivetrains
Market leadership in CVJ systems

Global shares 2012
Other
Selective wins, controlled growth Reducing fixed cost structure
In-house
GKN 41% Wanxiang/ Neapco Wia Kofco Nexteer NTN
Optimising LCC sourcing strategy

Recovering material costs / inflation Driving operational excellence Favourable capacity / competitor dynamic Strong margin management actions
GKN positioning in key growth regions

N. America
Brazil China India
GKN Driveline
Technology leadership in CVJ systems

Progressing with roll-out of new light-weight, fuel-efficient CVJ technology
FWD vehicles
GKN Driveline SX8

Lighter and smaller package space 1% fuel saving / CO2 reduction 50 for premium applications
3 MILLION/YEAR GROWING TO 8 MILLION IN 2018
RWD vehicles
GKN Driveline VL3

Lighter (up to 3.8kg per car set) Packaging space reduction (9%) Higher power transfer and efficiency
TARGET TO LAUNCH IN 2015
The making of the global leader in AWD Systems

Major milestones
1985 Commercialisation of the viscous coupling begins becomes a global industry standard for AWD in 1990s 2011 GKN acquires Getrag Driveline Products 2013 Will launch 1st AWD disconnect system
2011 Launch of 1st electric axle
1990 .
2000
2010
2006 GKN establishes Torque Shanghai
2004 GKN acquires Tochigi Fuji Sangyo
2013 GKNs SDS JV expanded to include AWD
Globally balanced sales and customer profile in AWD
453m
423m 384m
Americas
Europe
Asia
Based on 2012 sales
Vehicle driveline content increasing

Front-Wheel-Drive (FWD) Rear-Wheel-Drive (RWD)
with independent suspension
Front sideshafts
Directional Value Index 100 500

Rear sideshafts
Rear Propshaft Rear Final * Drive Unit
* Limited slip
differentials (LSD) sometimes fitted in Rear FDU
Vehicle driveline content increasing

All-Wheel-Drive (AWD)
Front sideshafts
Four-Wheel-Drive (4WD)
with independent suspension Front Axle* Front sideshafts
Power Transfer Unit Propshaft Coupling Rear Final Drive Unit Rear sideshafts
Directional Value Index 900 1200
Front Propshaft Transfer Case

(incl. Coupling or TMD)
Rear Propshaft
Rear Final * Drive Unit
* Option fitment
Rear sideshafts
of Limited Slip Differential (LSD) or Locker
Growing demand for AWD

Consumers like AWD
Safety, assured driving, performance and image
OEMs like AWD

Improves vehicle performance and image Sellable feature with content and margin
Both want acceptable fuel economy and CO2
Front-wheel drive
Traditional All-wheel drive
Technology roadmap addresses legislative challenges

The challenge of tougher legislation for emissions and fuel efficiency
2015
EU Legislation 130gCO2/km
2020
95gCO2/km
2025
75gCO2/km
GKN Drivelines technology response

Todays AWD
Optimised AWD
Disconnect AWD
Hybrid/electric AWD
Fuel / CO2 Improvement
< 1.5%
4% to 5%
20% - 40%
GKN can influence market technology uptake systems capability important

Positioned to continue outperforming the market

Global LV market growth
Mega-platforms
AWD systems content
Mega-platforms and AWD growth and content
GKN Driveline target growth c.2% ahead of market

Unrivalled global positioning
Geographic footprint Broad customer base Strength in growth markets
Technology leadership / increasing AWD content

Response to tighter legislation Customer co-developments Fuel-efficient products
Globally competitive
Increasingly lean and agile cost structure
GKN Driveline
All-Wheel Drive Systems
Lars Christiansson | MD GKN Driveline Kping & Bruneck
Joining GKN Drivelines AWD business

Highlights personal observations Kping and Newton plants integrated from October 2011
Worked together early to adopt best practices

Cultural fit with focus on safety and excellence Expanded product and development capability Well-received by customers business continuing to grow High employee satisfaction
Technology leadership in AWD
Technology leadership in AWD
Three key technologies for GKN Driveline AWD Disconnect systems Electric axle & hybrid AWD Full AWD systems integration
Link to video
AWD Disconnect The best of both worlds

Traditional AWD is less fuel efficient than 2WD Additional weight Drag, friction and churn losses AWD Disconnect Eliminates many of the losses Improved fuel efficiency Seamless connect and disconnect
3 customer launches in 2013/14
Mainstream AWD disconnect application
Targets broad market for SUVs and Crossovers
Challenging technology development with major fuel efficiency benefits
Premium AWD disconnect application
With a twin-clutch, TWINSTER rear-drive module for enhanced vehicle dynamic Unique GKN capability
AWD hybrid with electric axle

Full AWD performance
GKN patented disconnect system (e-Axle in-use only when needed)

Hybrid functionality Electric-only driving (short range) 40% fuel efficiency improvement 7 customer programmes launched or under development
Source: PSA
New product launch 2-speed electric axle

Launching 2014
Performance & efficiency
Unique full AWD systems capability

Design, manufacture and sourcing of components Complete development, test and validation capability
Vehicle dynamics tuning, software & electronic controls

Customer co-developments
Summary
Technology leadership is aligned with market trends for fuel efficiency and low CO2 AWD disconnect systems launching this year Growing customer interest in hybrid AWD with electric axle Unique AWD system capability GKN has the product and the technology Important and successful acquisition of Getrag Driveline gives GKN a market leading AWD footprint
GKN Driveline
Conclusion
Andy Reynolds Smith | CEO, GKN Automotive
GKN Driveline summary

Growth c.2% above market
AWD volumes with higher content Excellent position in growth markets Global footprint serving megaplatforms
Margin range 8% to 10%

Selective business wins Disciplined pricing behaviour Operational excellence Lean cost structure
ROIC >20%
Strategic outsourcing policy Prioritised investment Disciplined capital allocation
Business performance
Strong cashflow

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GKN Driveline

Business overview and strategy

2 GKN CAPITAL MARKETS DAY 21 MAY 2013

GKN Driveline An excellent global footprint

U.K. France Spain Italy Slovenia Turkey

Sweden Poland Germany

South Korea China India Taiwan Japan

3 GKN CAPITAL MARKETS DAY 21 MAY 2013

GKN Driveline performing as the market leader Delivering on a commitment

Technology roadmap aligned to market needs

Creating distinct competitive advantage

4 GKN CAPITAL MARKETS DAY 21 MAY 2013

Sales growth above market

Organic growth of c.5% above market driven by:

Unrivalled driveline product and systems capability

6 GKN CAPITAL MARKETS DAY 21 MAY 2013

Leading positions in our core product segments

Magna (inc. WIA JV)

Source: GKN estimated rankings on 2013 basis; excludes in-house.

7 GKN CAPITAL MARKETS DAY 21 MAY 2013

Balanced global footprint with excellent regional balance

Asia Strong growth in China Japan weaker m

8 GKN CAPITAL MARKETS DAY 21 MAY 2013

Operational excellence on a global scale

Simplifying global supply chains

Relentless focus on waste reduction World class quality disciplines

Expanding capability for high growth markets

AWD Investment supports global growth

10 GKN CAPITAL MARKETS DAY 21 MAY 2013

Full driveline capability in China

Participating in rapidly growing SUV and AWD market

GKN Driveline sales

8 manufacturing plants 3,800 people

11 GKN CAPITAL MARKETS DAY 21 MAY 2013

Well positioned with global customers and platforms

FIAT Ford, 10% Chrysler, 10%

Strategic relationships with early involvement

Mega-platforms an opportunity to accelerate global growth

The leading component, solutions and systems supplier

Greater deployment of advanced technology products Fuel-efficient, light-weight, high performance

13 GKN CAPITAL MARKETS DAY 21 MAY 2013

Market leadership in CVJ systems

Selective wins, controlled growth Reducing fixed cost structure

Optimising LCC sourcing strategy

GKN positioning in key growth regions

14 GKN CAPITAL MARKETS DAY 21 MAY 2013

Technology leadership in CVJ systems

GKN Driveline SX8

3 MILLION/YEAR GROWING TO 8 MILLION IN 2018

GKN Driveline VL3

TARGET TO LAUNCH IN 2015

15 GKN CAPITAL MARKETS DAY 21 MAY 2013

The making of the global leader in AWD Systems

2011 Launch of 1st electric axle

2004 GKN acquires Tochigi Fuji Sangyo

2013 GKNs SDS JV expanded to include AWD

16 GKN CAPITAL MARKETS DAY 21 MAY 2013

Globally balanced sales and customer profile in AWD

Based on 2012 sales

17 GKN CAPITAL MARKETS DAY 21 MAY 2013

Vehicle driveline content increasing

Directional Value Index 100 500

Rear Propshaft Rear Final * Drive Unit