GKN ahead of expectations, tripling 2021 group profit

March 3, 2022

Melrose Industries PLC, UK, has announced its financial results for the year ended December 31, 2021, reporting the company to be ahead of expectations and with better cash generation and a bigger reduction in net debt.

All businesses returned to growth and, despite global supply challenges, group sales were up 2% year on year. Group adjusted operating profit tripled to £375 million, said to show the substantial benefit of restructuring actions increasingly coming through.

“We have enjoyed another year of good cash performance across the Group, while continuing to invest heavily in sustainable technology and restructuring improvements,” stated Justin Dowley, Melrose’s non-executive chairman. “We achieved strong free cash flow generation, which has been a feature throughout our ownership of the GKN businesses. Along with disposal proceeds, it has enabled us to repay all of the £3.4 billion of net debt drawn to fund the GKN acquisition.”

GKN Powder Metallurgy

GKN Powder Metallurgy reported a strong performance in 2021, with adjusted operating margins for the full year expanding to 9.3% and adjusted operating profit up 162%. This improvement was noted as having come from stronger activity levels, primarily during the first quarter; tight cost management during the lower activity months and the realisation of benefits arising from restructuring activities initiated during prior years.

Melrose stated that 2021 was marked improvement in activity levels for GKN Powder Metallurgy across all geographies. The demand for vehicles and other goods in general, combined with the need by the industry to recover from the low stock levels maintained during the previous year, produced very high demand during the first quarter of the year. This high activity level in the first three months was followed by lower, more erratic demand, stemming from the semiconductor shortage’s effect on the automotive industry.

For the full year, GKN Powder Metallurgy achieved a revenue growth of 13% compared with the previous year. Although revenue levels remain below pre-pandemic levels, sales volume growth for the business in 2021 was double the production growth of the wider market, highlighting the increased market share achieved by the business.

As part of the improvement plan, the core business has been streamlined, resulting in the divestment in May 2021 of a non-core low margin structural plant in the USA, and a planned Canada plant closure, which is set to be concluded during 2022. In addition, the closure of a Sinter Metals site in Germany was communicated in November.

Having taken it through the initial development phase, GKN Hydrogen, the hydrogen storage business, was also separated into a standalone business under direct Melrose management at the end of the year.

www.melroseplc.net

www.gkn.com

Powder Metallurgy Review magazine cover

In the latest issue of PM Review…

Download PDF

Extensive Powder Metallurgy industry news coverage, and the following exclusive deep-dive articles and reports:

  • Hot Isostatic Pressing for the production of large, near-net shape components
  • Safeguarding PM part usage in a new automotive industry
  • How to make metal powders., Part 3
  • Company profile: Jiangxi Yuean Advanced Materials

The latest news from the world of metal powders, delivered to your inbox

Don't miss any new issue of PM Review, and get the latest industry news. Sign up to our weekly newsletter.

Sign up

From the industry…

Discover our magazine archive…

The free-to-access PM Review magazine archive offers unparalleled insight into the world of Powder Metallurgy from a commercial and technological perspective through:

  • Reports on visits to leading PM part manufacturers, metal powder manufacturers and industry suppliers
  • Articles on technology and application trends
  • Information on materials developments
  • Reviews of key technical presentations from the international conference circuit
  • International industry news

All past issues are available to download as free PDFs or view in your browser.

 

Browse the archive

 

Looking for PM production equipment, metal powders, R&D support and more?

Discover suppliers of these and more in our
advertisers’ index and buyer’s guide, available in the back of PM Review magazine.

  • Powders & materials
  • Powder process, classification & analysis
  • PM products
  • Atomisers & powder production technology
  • Compaction presses, tooling & ancillaries
  • Sintering equipment & ancillaries
  • Post-processing
  • Consulting & toll sintering
Download PDF
Share via
Copy link