GKN has unveiled 2017 Group profit before tax down 16% to GBP572m (US$786m) with its Driveline division showing organic sales growth of 9%.
The British supplier – subject of a bid from manufacturing investor, Melrose – says the Driveline growth was “significantly ahead of global auto production, helped by our broad geographic footprint and strong positions on high growth global platforms,” while its eDrive order book extended to more than GBP2bn.
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“GKN has fantastic businesses which have grown organically above our key markets, demonstrating our strong positions and technology,” said GKN chief executive, Anne Stevens.
“However as I set out two weeks ago, we now need to change our emphasis and ensure those orders deliver world class financial performance with a renewed focus on strong margins and cash generation.
“With Project Boost, I have laid out how we plan to achieve this, through detailed product segment strategies and an emphasis on manufacturing and functional excellence.”
The supplier also provided further information on plans to separate its Aerospace and Driveline businesses. GKN is in the process of separating operationally and the board has determined to formally separate GKN Aerospace and GKN Driveline into two listed companies via a demerger.
The aim is to complete the demerger in the middle of 2019, creating two companies with investment grade balance sheets which can support their share of the Group’s pension liabilities. The basis on which to progress these discussions has been agreed with the UK Pension Trustees.
A demerger represents GKN’s base case separation structure for a number of reasons, including that the timetable is within GKN’s control, it allows GKN to allocate liabilities appropriately and it is tax efficient, maintains the company.
