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Investor Presentation Q4 2014 Strong cash flow, lower comparable - - PowerPoint PPT Presentation

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Investor Presentation Q4 2014 Strong cash flow, lower comparable EBITDA and revenue February 12, 2015 Matti Hyytiinen, President & CEO PKC Investor Presentation Q4 2014 Q4/2014 Highlights Business Environment European truck

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SLIDE 1

Investor Presentation Q4 2014

Strong cash flow, lower comparable EBITDA and revenue

PKC Investor Presentation Q4 2014

February 12, 2015 Matti Hyytiäinen, President & CEO

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SLIDE 2
  • European truck production decreased

significantly from previous year

  • North American truck production

increased from previous year driven by replacement and expansion sales

Q4/2014 Highlights

February 12, 2015 PKC Investor Presentation Q4 2014 2

Business Environment PKC’s Operations PKC’s Financial Performance

  • Utilization rates improved in North

America, but with additional costs

  • Development program progressing in

Europe and South America

  • Strong cash flow after capex of EUR

30.7 million in the fourth quarter

  • Comparable EBITDA and revenue

decreased from previous quarter

  • Dividend proposal is EUR 0.70 per

share

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SLIDE 3
  • Nogales (Mexico), Sosnowiec (Poland),

Haapsalu (Estonia) and Itajuba (Brazil) factories practically closed by year end of 2014

  • New flexible and cost-efficient factories in

Lithuania and Serbia are in production and continue to be further ramped up

Strategy 2018 Update

February 12, 2015 PKC Investor Presentation Q4 2014 3

Maximizing current PKC set-up Penetrating into APAC

  • Quotation activities are on a high level in China
  • Implementation of the strategy is proceeding,

and focus has been on several projects during the quarter

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SLIDE 4

Key Figures

February 12, 2015 PKC Investor Presentation Q4 2014 4

EUR million 10-12/14 10-12/13 Change % 1-12/14 1-12/13 Change % Revenue 208.5 212.1

  • 1.7

829.2 884.0

  • 6.2

EBITDA1) 9.1 13.9

  • 34.5

48.9 70.3

  • 30.5

EBITDA1) % 4.4 6.6 5.9 8.0 Non-recurring items

  • 11.7
  • 2.1
  • 28.4
  • 10.4

Operating profit (loss)

  • 9.6

4.6

  • 6.7

30.5 EPS (EUR)

  • 0.63

0.08

  • 1.21

0.63 Cash flow from operations 34.4 23.0 41.0 39.7 Gross capital expenditure 4.0 4.1 19.9 14.6 Net working capital2) 26.2 63.5 26.2 63.5 Total assets 456.3 455.6 456.3 455.6 Gearing, %

  • 5.6
  • 1.1
  • 5.6
  • 1.1

1) Excluding PPA depreciation and amortisation and non-recurring asset impairment and write-downs 2) Includes additional tax liability of EUR 8.3 million

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SLIDE 5

Revenue

February 12, 2015 PKC Investor Presentation Q4 2014 5

128.9 130.7 120.2 111.6 114.4 120.7 129.7 129.1 50 100 150 200 250 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14

North America

56.0 61.6 54.4 64.8 54.4 51.9 45.4 52.8 13.0 12.0 10.9 10.1 9.7 9.6 9.6 7.8 50 100 150 200 250 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14

Europe

22.2 23.6 20.2 20.2 17.0 16.7 19.5 12.7 50 100 150 200 250 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14

South America

208.4 217.2 196.4 198.4 188.4 191.5 195.6 195.9 16.7 17.9 15.3 13.7 15.4 14.7 15.1 12.6 50 100 150 200 250 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14

Total Group

EUR million EUR million EUR million EUR million

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SLIDE 6

Average Number of Personnel

February 12, 2015 PKC Investor Presentation Q4 2014 6

12,151 11,617 11,051 11,126 11,081 11,507 12,265 12,212 5,000 10,000 15,000 20,000 25,000 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14

North America

4,305 4,508 4,404 4,769 4,676 4,661 5,131 5,362 417 302 266 245 236 242 233 233 5,000 10,000 15,000 20,000 25,000 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14

Europe

3,035 3,335 3,076 2,964 2,838 2,766 2,668 2,520 5,000 10,000 15,000 20,000 25,000 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14

South America

19,526 19,501 18,589 18,921 18,659 19,004 20,136 20,164 745 664 647 620 616 652 631 583 5,000 10,000 15,000 20,000 25,000 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14

Total Group

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SLIDE 7

Net Working Capital

February 12, 2015 PKC Investor Presentation Q4 2014 7 109.0 112.9 106.1 92.7 105.7 102.8 112.3 89.0 92.1 87.8 87.7 80.2 80.4 82.2 83.4 79.4

  • 94.8
  • 90.8
  • 88.4
  • 88.7
  • 87.0
  • 86.3
  • 95.9
  • 98.3
  • 25.3
  • 26.6
  • 23.4
  • 20.7
  • 17.6
  • 20.5
  • 32.9
  • 44.0

2 4 6 8 10 12 14 16

  • 150
  • 100
  • 50

50 100 150 200 250 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Trade payables Other liabilities and receivables*** NWC* % of Revenue** Inventories Trade receivables

* Average of previous four quarters ** Revenue of previous 12 months *** Related to employee benefits, taxes and financial

  • items. Since Q3/14 includes additional tax liability of EUR

8.3 million and non-recurring items booked, but not paid.

EUR million % 81.0 83.2 82.0 63.5 81.6 78.2 66.9 26.2

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SLIDE 8

Cash Flow

February 12, 2015 PKC Investor Presentation Q4 2014 8 76.0 39.7 41.0

  • 12.3
  • 14.8
  • 20.3

63.7 24.9 20.7

  • 40
  • 20

20 40 60 80 100 2012 2013 2014 Cash from operations Capital expenditure Free cash flow EUR million

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SLIDE 9

Balance Sheet and Returns

February 12, 2015 PKC Investor Presentation Q4 2014 9

33.9 42.7 34.7 30 35 40 45 2012 2013 2014 Equity ratio, % 34.4

  • 1.1
  • 5.6
  • 10

10 20 30 40 50 60 70 80 90 100 2012 2013 2014 Gearing, % 56.6

  • 2.2
  • 8.9

0.7 0.0

  • 0.3
  • 0.4

0.0 0.4 0.8 1.2 1.6 2.0 2.4

  • 10

10 20 30 40 50 60 70 80 90 100 2012 2013 2014 Net debt Net debt to EBITDA* 15.1 7.8

  • 16.5

16.7 14.7 5.3

  • 20
  • 15
  • 10
  • 5

5 10 15 20 2012 2013 2014 ROE, % ROI, % % EUR million % %

*EBITDA of previous 12 months

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SLIDE 10
  • With constant FX rates revenue

decreased 6% from comparison period and 3% from previous quarter

– European and South American truck production volumes clearly lower – Light-vehicle build-outs reduced revenue in North America – In Europe, the revenue has also been impacted by changes in the product portfolio

  • Adjusted EBITDA down from previous

quarter and comparison period

– Additional expenses in North America to meet increased demand of trucks – Losses continued in Brazil – Reorganisation and program transfers in Europe

Wiring Systems Segment, Q4/2014

February 12, 2015 PKC Investor Presentation Q4 2014 10

208.4 188.4 217.2 191.5 196.4 195.6 198.4 195.9 170 180 190 200 210 220 230 2013 2014

Revenue

Q1 Q2 Q3 Q4 EUR million 18.5 12.0 20.2 13.0 16.6 15.2 15.2 11.2 5 10 15 20 25 2013 2014

Adjusted EBITDA

Q1 Q2 Q3 Q4 Illustrated net of non-recurring items EUR million

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SLIDE 11

PKC Market Share 1-12/2014

February 12, 2015 PKC Investor Presentation Q4 2014 11

58% 42% 42% 58% 36% 64% 1% 99% 34% 66% 23% 77% 2% 98% 0% 100 % North America Brazil Europe

Medium Duty Trucks Heavy Duty Trucks

Source: PKC Group, ACT Build History January 2015, LMC Automotive forecasting Q4/2014. Note: Europe comprised of EU27 + Efta

APAC

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SLIDE 12

EU27+ EFTA Truck Production

February 12, 2015 PKC Investor Presentation Q4 2014 12 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 2013 2014 2015 2016 2017 2018 Heavy Duty Trucks Medium Duty Trucks

  • Transition to Euro 6 emission standard at the beginning of 2014 has kept the

demand of trucks below that of previous year, especially in the fourth quarter

  • The economic environment especially in the southern parts of Europe has

suppressed truck demand

Source: LMC Automotive forecasting Q4/2014

units

  • 8%
  • 18%

+5% +3%

EURO 6

PKC estimates production volume to remain on previous year’s level at the most

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SLIDE 13

North America Production

February 12, 2015 PKC Investor Presentation Q4 2014 13 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 2013 2014 2015 2016 2017 2018 Heavy Duty Trucks Medium Duty Trucks

  • The conditions continue to be

favourable for healthy truck demand in North America

  • The growth is related both to

replacement and expansion sales

Source: LMC Automotive forecasting Q4/2014

units +21% +11% +14%

  • 3%

7,000,000 8,000,000 9,000,000 10,000,000 2013 2014 2015 2016 2017 2018

Light Vehicle (Pick-up and SUV)

+8% +1% units

EPA 2014

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SLIDE 14

Brazil Truck Production

February 12, 2015 PKC Investor Presentation Q4 2014 14 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 2013 2014 2015 2016 2017 2018 Heavy Duty Trucks Medium Duty Trucks

  • In Brazil the current economic situation and reduced governmental incentives

have had a negative impact on the demand for trucks

  • Increased volatility and additional customer shut-downs taking place within the

industry

Source: LMC Automotive forecasting Q4/2014

units

  • 13%
  • 13%

+1% +6% PKC estimates production volume to be lower than previous year

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SLIDE 15
  • Revenue decreased 8% from

comparison period

  • Due to lower and more volatile

revenue the profitability was lower than in the comparison period

Electronics Segment, Q4/2014

February 12, 2015 PKC Investor Presentation Q4 2014 15

16.7 15.4 17.9 14.7 15.3 15.1 13.7 12.6 5 10 15 20 2013 2014

Revenue

Q1 Q2 Q3 Q4 EUR million 1.5 1.2 2.1 0.8 1.7 1.2 0.6 0.2 0.0 0.5 1.0 1.5 2.0 2.5 2013 2014

Adjusted EBITDA

Q1 Q2 Q3 Q4 Illustrated net of non-recurring items EUR million

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SLIDE 16
  • European heavy-duty and medium-duty

truck production is estimated to remain

  • n previous year’s level at the most.
  • North American heavy-duty truck

production is estimated to increase by 14% and medium-duty truck production to decline by 3% compared to 2014.

  • Brazilian heavy-duty and medium-duty

truck production is estimated to be lower than previous year.

  • The market demand for Electronics

segment’s products is expected to remain at the current level.

Market Outlook – Full Year 2015

February 12, 2015 PKC Investor Presentation Q4 2014 16

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SLIDE 17
  • PKC Group estimates that with

prevailing exchange rates 2015 revenue will be close to previous year level, and that comparable EBITDA will be higher than in 2014.

  • Revenue and EBITDA estimates are based
  • n current business structure.
  • In 2014, PKC’s revenue was EUR 829.2

million and comparable EBITDA before non-recurring items was EUR 48.9 million.

PKC Group’s Outlook

February 12, 2015 PKC Investor Presentation Q4 2014 17

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SLIDE 18

PKC’s Strategy Captures Growth Opportunities

February 12, 2015 PKC Investor Presentation Q4 2014 18

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SLIDE 19

PKC Group Plc Unioninkatu 20-22 FI-00130 Helsinki, Finland www.pkcgroup.com

PKC Investor Presentation Q4 2014 February 12, 2015