Annual Report 2008 in PDF - GKN

86
Notes to the Financial Statements
continued
2 Segmental analysis continued
Secondary reporting format — by geographical region
GKN plc Annual Report 2008
Sales by destination Segment assets Capital expenditure
2008 2007 2008 2007 2008 2007
£m £m £m £m £m £m
Continuing operations
Europe 2,018 1,773 1,709 1,411 96 87
Americas 1,748 1,595 1,623 1,315 78 75
Rest of the World 610 501 546 417 31 32
Corporate and Unallocated — — 189 345 — —
4,376 3,869 4,067 3,488 205 194
3 Operating profit
The analysis of the components of operating profit is shown below:
(a) Trading profit
2008 2007
£m £m
Sales by subsidiaries 4,376 3,869
Less: UK cylinder liner manufacturing operation — (22)
Operating costs and other income
4,376 3,847
Change in stocks of finished goods and work in progress 18 12
Raw materials and consumables (1,737) (1,415)
Unwind of fair value inventory adjustments arising on business combinations — (1)
Staff costs (note 9)
Reorganisation costs (note (i)):
(1,232) (1,100)
Redundancy and other amounts (5) (4)
Impairment of plant and equipment (1) (1)
Depreciation of property, plant and equipment (note (ii)) (165) (141)
Amortisation of intangible assets
Operating lease rentals payable:
(10) (9)
Plant and equipment (12) (12)
Property (23) (20)
Impairment of trade receivables (6) (3)
Amortisation of government grants 2 2
Net exchange differences on foreign currency transactions 3 (1)
Other costs (note (iv)) (1,007) (877)
(4,175) (3,570)
Trading profit 201 277
(i) Reorganisation costs shown above reflect ongoing actions in the ordinary course of business to reduce costs, improve productivity and
rationalise facilities in continuing operations. Costs incurred include redundancy and related post-employment obligation charges,
asset write-downs and impairments and other revenues and expenditure directly attributable to the reorganisation actions. Headcount
realignment activity continued at a cost of £3 million (2007 – £3 million). Rationalisation of a UK facility continued at a cost of £2 million
(2007 – £2 million including a £1 million plant and equipment impairment charge).
(ii) Including depreciation charged on assets held under finance leases of £1 million (2007 – £1 million).
(iii) Research and development expenditure in subsidiaries was £90 million (2007 – £81 million).
(iv) Other costs include a £5 million credit from the release of an unutilised provision established on acquisition as a result of changed
customer contract requirements in an Aerospace business and a £3 million charge in respect of abortive acquisition costs in Driveline.
Property surpluses were nil (2007 – £4 million).