GKN reveals overall growth despite slowdown in China

REDDITCH-based engineering giant GKN has seen organic sales growth of 2% for the nine months ended September 30.

In a trading update to the London Stock Exchange, the firm – which serves the aerospace, automotive and land systems markets – said performance is in line with expectations but added that it is expecting to see no growth from China in the fourth quarter and is reducing its costs in Brazil.
 
Management sales for the nine month period were £5,683m (2014: £5,617m). 

GKN Aerospace sales in the period were £1,756m (2014: £1,642m), slightly up on an organic basis. 

Commercial sales were helped by the ramp-up of new aircraft which more than offset lower A330 production. Military demand declined, as expected, with the ending of C17 production.

The firm said GKN Aerospace continues to transition from older programmes to new platforms, which have significant GKN content and will provide future growth. In addition, the acquisition of Fokker Technologies, which is expected to complete shortly, will further strengthen its technology, manufacturing footprint and bring additional content on key growth programmes.
 
GKN Driveline delivered sales in the nine months of £2,665m (2014: £2,594m). 

Good organic growth was achieved in Europe where it continued to grow strongly above the market. In the Americas and Asia, sales were up modestly. China production rates reduced in recent months in line with concerns over the economic outlook. Market forecasts for China now show no growth in the fourth quarter this year. 

“We experienced weakness in the third quarter as there was a greater shift towards domestic brands, but with the help of new launches, we expect to outperform the market in the fourth quarter,” GKN said. “Our weakest market is Brazil, where we are reducing costs.”

GKN Powder Metallurgy sales in the nine months were £694m (2014: £696m) while at GKN Land Systems sales in the period declined to £535m (2014: £602 million).