Sparks set to fly on takeover battle as GKN reveals £2bn of electric vehicle business
Engineering group GKN has underlined the strength of its work in the Electric Vehicle market by revealing an order book worth £2bn.
The announcement could be seen as a ploy to reinforce the value of the Redditch-based company in its current takeover battle with turnaround specialist Melrose.
Melrose last week upped its £7bn offer for the company to £7.4bn in a move designed to persuade GKN shareholders to see the value in a takeover.
GKN is standing by its view that the offer still undervalues the business.
GKN said in a market update today that its order book for electric driveline (eDrive) technologies hit a record £2bn by the end of last year following a series of significant programme wins with major global vehicle manufacturers.
“The order book growth underpins and extends GKN’s market-leading position in eDrive systems,” it said.
Contracts include:
• GKN’s Multimode eTransmission system is due to launch on a Chinese OEMs platform across a number of vehicle models from 2018
• GKN is due to supply a semi-integrated electric driveline unit from 2019 for a new vehicle launched by a premium European automaker
• GKN has developed an integrated electric driveline system for a European OEMs global programme that is expected to be first launched in China from next year
Phil Swash, chief executive of GKN Automotive, said: “Customers worldwide choose to work with GKN on their electric programmes because of our real-world experience in eDrive systems. Whilst our competitors talk about the potential of their technologies, we have proven history of delivering innovative electric driveline systems in customers’ cars on the road.
“Our leading vehicle and systems integration capabilities help deliver the performance our customers demand and that’s why they come to us ahead of our competition. Our strong order book reflects the partnerships we have developed with our customers and the confidence they have in GKN. We are well positioned to capitalise on the strong market growth in hybrid and electric vehicles and this is underpinned by our substantial order book.”
GKN said its eDrive sales, which were previously forecast to rise from £33m in 2017 to £200m in 2020, were now expected to increase over eight-fold to £275m.
In addition, it said it believed that eDrive sales would reach £500m by 2022.
GKN said its success had been achieved through a long term commitment to Research and Development. In 2017, R&D expense charged to the income statement was £36m, with total investment of more than £123m over the past six years.
It said while impacting near-term financial performance, this investment was delivering strong sales and order book growth.
