Review of performance.

Group performance

  2011 2010 Change
          Headline Underlying
  GKN
pre acqns
Acqns Total   £ % £ %
Sales (£m) 5,957 155 6,112 5,429 683 13 563 10
Trading profit* (£m) 484 3 487 411 76 18 77 19
Trading margin* 8.1%   8.0% 7.6%        
ROIC 18.3%     17.0%        

(*) excludes the net £19 million impact from Gallatin

Management sales increased 13% in the year ended 31 December 2011 to £6,112 million (2010: £5,429 million). The effect of currency translation was £15 million adverse and there was a £164 million benefit from acquisitions which was partly offset by the £29 million reduction due to disposals. Excluding these items, the underlying increase was £563 million (10%). Within this figure, GKN Driveline was £252 million higher, GKN Powder Metallurgy increased by £97 million, GKN Aerospace was £52 million higher, while GKN Land Systems was up £148 million.

Management trading profit increased £76 million to £487 million (2010: £411 million), excluding the £19 million net impact from the temporary closure of Hoeganaes’ Gallatin facility in the US (£34 million cost, as previously announced, which was partially offset by £15 million of insurance recovery). The effect of currency translational was £3 million adverse and there was a £2 million net benefit from acquisitions. Excluding these items, the underlying increase was £77 million. Within this figure, GKN Driveline was £21 million higher, GKN Powder Metallurgy increased by £19 million, GKN Aerospace was up by £6 million and GKN Land Systems increased by £31 million. Excluding the Gallatin impact, Group trading margin increased to 8.0% (2010: 7.6%), against a target range of 8-10%.

Return on average invested capital (ROIC) increased to 18.3% excluding 2011 acquisitions, compared with the Group target of 20% or better.