Chairman’s statement. “GKN performed very well in 2011, delivering a strong set of results, despite continuing macroeconomic uncertainties.” Roy Brown, Chairman.
Delivering strong results.

It is particularly pleasing to report, in my final statement as Chairman, that GKN performed very well in 2011, delivering a strong set of results despite continuing macroeconomic uncertainties. Management profit before tax was £417 million and earnings per share increased to 22.6p. We made good progress against our financial KPIs, and net debt, excluding the acquisition costs of Stromag Holding and Getrag Driveline Products, continued to reduce. These two acquisitions, in GKN Land Systems and GKN Driveline respectively, strongly underpin our strategy of providing long-term sustainable growth.

In light of our performance and our confidence in the future prospects of the Company, the Board is recommending to shareholders a final dividend of 4.0p, which will bring the dividend for the year to 6.0p. This is in line with our progressive dividend policy designed to align dividends with the long-term trend in earnings.


The safety of our people has always been and will continue to be of paramount importance. The Board deeply regrets the fatalities that occurred at our Hoeganaes plant in Gallatin, USA, in the first half of the year. To ensure that the lessons learnt at Gallatin are reflected in our operating procedures and health and safety processes worldwide, we have put in place a number of corrective actions and improvements described elsewhere in this annual report, to strengthen yet further our safety focus and ensure the safety and wellbeing of all our employees Group wide.


We are committed to maintaining high standards of corporate governance in what is a constantly changing regulatory and governance environment. We set out in the corporate governance statement our governance procedures and disciplines and report on our compliance with the UK Governance Code throughout the year. The statement also describes our response to Lord Davies’ report on Boardroom Diversity.

I am satisfied that the Board continues to operate effectively, as confirmed in this year’s Board evaluation review, details of which are given in the corporate governance statement.


A great company like GKN is built by the tens of thousands of committed individuals who make up its workforce. These are the people who go that extra mile every day to deliver superior products and services for our customers and value for all our shareholders. I would like to take this opportunity to thank them all for their efforts in 2011.

Board changes

There is of course one specific individual to whom I would like to address thanks. Sir Kevin Smith retired as Chief Executive at the end of 2011 after nine years in that role and over 12 years with the Company. His leadership of the Group was outstanding, bringing together what some commentators suggested was the “rump” of the business following the demerger of our industrial services businesses in 2001 and developing it into a world class engineering company focused on the automotive, aerospace and land systems markets. Kevin helped lay the strongest of foundations for our growth strategy which we are on course to deliver. We thank him for his tremendous contribution to the Group and wish him well for the future.

GKN is very fortunate to have a very capable successor to Kevin in Nigel Stein. Nigel has been with GKN since 1994 and, having served in a number of roles including Group Finance Director and Chief Executive Automotive, he brings extensive skill and experience to the role.

In May 2011 we were pleased to welcome to the Board Tufan Erginbilgic who was appointed a non-executive Director. Tufan is Chief Operating Officer for the Refining and Marketing division of BP plc and his experience of the global energy industry brings a relevant and distinctive perspective to the Board.

My term of office as Chairman of the Company comes to an end at the close of the Annual General Meeting in May after an association with GKN of 16 years, eight of those as Chairman. It has been a great privilege to be involved in the Group’s progression over that period. In November last year we announced that Mike Turner will take over as Chairman when I retire. Mike has been a non-executive Director since September 2009 and was appointed Senior Independent Director in May 2010. His wealth of experience in the engineering sector and his wide boardroom experience make Mike an excellent choice. I wish him every success in the role.


As I look back on my 16 years’ involvement with GKN, the Company that has developed over this period is much more focused on its core engineering technology, underpinned by key capabilities that are deployed consistently across its operations worldwide. GKN has weathered many storms in its long history and, always mindful of the challenges of the current uncertain macroeconomic conditions, I am confident that GKN will continue to prosper for the benefit of all its stakeholders.

Roy Brown