PKC Group Plc Investor Presentation Q3/2012 1 November 2012 Matti - - PowerPoint PPT Presentation

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PKC Group Plc Investor Presentation Q3/2012 1 November 2012 Matti - - PowerPoint PPT Presentation

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PKC Group Plc Investor Presentation Q3/2012 1 November 2012 Matti Hyytiinen President & CEO 1 1 7-9/2012 Highlights Business Environment PKCs Operations Weakness in European truck market Quotation activities at high level.

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SLIDE 1

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PKC Group Plc

Investor Presentation Q3/2012

1 November 2012 Matti Hyytiäinen President & CEO

1

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SLIDE 2

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PKC’s Operations Business Environment

7-9/2012 Highlights

Weakness in European truck market remained. NA truck market started to cool down. Truck sales recovered in Brazil. Quotation activities at high level. Technology roadshows continued. Capacity adjustments due to increased demand fluctuations.

PKC’s Financial Performance

Strong cash flow from operations. Improved adjusted EBITDA % and EBIT %. Electronics recovery continued.

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SLIDE 3

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PKC Group Briefly

  • PKC Group operates in two core business

segments: Wiring Systems and Electronics

  • PKC designs and manufactures electrical

distribution systems, wire & cables, wiring components and electronics

  • The Group’s products and services are

delivered mainly to the commercial vehicle, automotive and electronics industries

  • Global footprint with headquarters in

Helsinki, Finland

  • The Group’s net sales amounted to EUR

714.2 million in 1-9/2012

  • 20,165 employees globally at the end of

Q3/2012

  • PKC Group Plc is listed in NASDAQ OMX

Helsinki Ltd.

3

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Growth Through Focused Investments

  • Adj. EBITDA(1) EUR million Development Over Time

(1) Illustrated net of non-recurring items 4

1997 1998 2000 2002 2003 2005 2006 2007 2008 2009

Brazilian factory was

  • pened

Acquisition of

electronics business

Acquisition of

Estonian production

Operations started in

China

PK Cables listed in

the Helsinki Stock Exchange

Acquisition of

Russian production

Acquisition of

Electro Canada in Canada, the USA and Mexico

Acquisition of MAN

business in Poland

2010 2011

Acquisition of SEGU

in Germany, Poland and Ukraine

Acquisition of AEES

in North America, Brazil and Ireland

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SLIDE 5

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PKC Group’s Executive Board

President & CEO Matti Hyytiäinen

WIRING SYSTEMS EUROPE & APAC President, WS, Europe & APAC Harri Ojala FINANCE CFO Juha Torniainen LEGAL & CORPORATE DEVELOPMENT General Counsel Sanna Raatikainen WIRING SYSTEMS SOUTH AMERICA President, WS, South America Pekka Korkala WIRING SYSTEMS NORTH AMERICA President, WS, North America Frank Sovis BUSINESS DEVELOPMENT Senior Vice President, Business Development Jyrki Keronen ELECTRONICS President, Electronics Jarmo Rajala

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SLIDE 6

PKC locations today

6 Barchfeld, Germany (M) Dundalk, Ireland (M) Haapsalu, Estonia (M) Helsinki, Finland (HQ) Keila, Estonia (M) Kempele, Finland Kostomuksha, Russia (M) Mukachewo, Ukraine (M) Munich, Germany Raahe, Finland (M) Sosnowiec, Poland (M) Starachowice, Poland (M) Suzhou, China (M) Campo Alegre, Santa Catarina, Brazil (M) Curitiba, Brazil (M) Itajuba, Brazil (M) São Bento do Sul, Brazil (M) São Paulo, Brazil

Wiring Systems business Electronics business Manufacturing

Acuna, Mexico (M) Dallas, Texas Green Valley, Arizona Farmington Hills, Michigan Jeffersontown, Kentucky Juarez, Mexico (M) Kirkland, Washington Monterey, Mexico Nogales, Mexico (M) Piedras Negras, Mexico (M) Portland, Oregon San Antonio, Texas Torreon, Mexico (M) Traverse City, Michigan (M)

North America

South America

Europe

Asia

(M)

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SLIDE 7

PKC Sales Split

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SLIDE 8

Geographical split

APAC 2 % North America 61 % South America 13 % Europe 24 %

Personnel at the end of Q3/2012

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Key Figures, 1-9/2012

EUR million 1-9/12 1-9/11 Change % 1-12/11 Net sales 714.2 308.2 131.7 550.2 EBITDA 65.8 38.8 69.6 59.5 Depreciation and amortisation1) 12.6 7.4 70.3 10.5 PPA depreciation and amortisation 10.6 1.9 457.9 7.0 EBIT 42.6 29.6 43.9 42.0 Non-recurring items 3.2 3.8

  • 15.8

7.5 EBIT after non-recurring items 39.4 25.7 53.3 34.5 Financial items

  • 5.2
  • 4.0
  • 5.1

Taxes

  • 11.0
  • 4.1
  • 6.0

Net profit 23.3 17.6 32.4 23.4 EPS, (EUR) 1.09 0.87 25.3 1.16

1) Excluding PPA depreciation and amortisation

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Key Figures, 7-9/2012

EUR million 7-9/12 7-9/11 Change % 1-12/11 Net sales 227.4 102.0 122.9 550.2 EBITDA 22.5 13.9 61.9 59.5 Depreciation and amortisation1) 4.6 2.6 76.9 10.5 PPA depreciation and amortisation 3.5 0.7 400.0 7.0 EBIT 14.4 10.6 35.8 42.0 Non-recurring items 1.9 1.7 11.8 7.5 EBIT after non-recurring items 12.5 9.0 38.9 34.5 Financial items

  • 2.7
  • 4.4
  • 5.1

Taxes

  • 3.1
  • 0.9
  • 6.0

Net profit 6.7 3.7 81.1 23.4 EPS, (EUR) 0.31 0.19 63.2 1.16

1) Excluding PPA depreciation and amortisation

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Key Figures, 9/2012

EUR million 9/12 9/11 Change % 12/11 Goodwill 30.7 13.7 124.1 29.8 Intangible assets 46.0 9.9 364.6 50.1 Property, plant and equipment 98.4 46.6 111.2 113.6 Others 38.1 5.2 632.7 27.9 Total non-current assets 213.2 75.5 182.4 221.4 Inventories 92.1 73.0 26.2 110.5 Trade receivables 104.5 56.6 84.6 104.0 Cash and cash equivalents 75.4 17.9 321.2 52.3 Others 24.1 132.0

  • 81.7

20.7 Total current assets 296.0 279.5 5.9 287.4 Total assets 509.2 355.0 43.4 508.8

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Key Figures, 9/2012

EUR million 9/12 9/11 Change % 12/11 Total equity 165.4 128.2 29.0 152.5 Total non-current liabilities 136.8 148.9

  • 8.1

205.6 Trade payables 90.6 31.6 186.7 90.8 Other current liabilities 116.4 46.2 151.9 59.9 Total current liabilities 207.0 77.8 166.1 150.7 Total liabilities 343.8 226.8 51.6 356.3 Total equity and liabilities 509.2 355.0 43.4 508.8

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Key Figures, 1-9/2012

EUR million 1-9/12 1-9/11 Change % 1-12/11 Net cash from operating activities 60.8 4.4 1281.8 40.0 Cash flow after investments 52.1

  • 16.7
  • 50.2

Net working capital 82.7 88.0

  • 6.0

100.7 Net debt 69.4 140.0 110.7 ROI, % 20.1 19.3 18.9 Equity ratio, % 32.5 36.1 30.0 Gearing, % 42.0 109.2 72.6

  • No. of employees at closing

20,165 8,618 132.8 21,895

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Net Sales Adjusted EBITDA % and EBIT % Net Sales by Geographical Areas

Key Figures, 1-9/2012

46,8 45,4 176,3 166,5 19,4 429,8 50,7 56,8 15,1 15,6 100 200 300 400 500 600 700 800 1-9/2011 1-9/2012

Finland Other Europe North America South America APAC EUR million

60,8 96,9 242,0 81,0 109,3 244,8 82,3 102,0 227,4 91,9 242,0 20 40 60 80 100 120 140 160 180 200 220 240 260 2010 2011 2012

Q1 Q2 Q3 Q4 Illustrated net of non-recurring items, %

6,2 12,5 20,4 10,3 12,5 22,9 13,2 13,9 22,5 12,4 20,6 0,0 5,0 10,0 15,0 20,0 25,0 2010 2011 2012 Q1 Q2 Q3 Q4

Adjusted EBITDA

Illustrated net of non-recurring items, EUR million EUR million

2 4 6 8 10 12 14 16 18 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12

EBITDA % Operating profit %

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Cash Flows after Investments Net Investments Return on Investment (ROI), %

Key Figures, 1-9/2012

8.1 10.6 7.9 8.7 79.6 13,2 0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 90,0 100,0 2010 2011 Q3/11 Q3/12

Other Investments Acquisition

14.9

  • 50.2
  • 16.7

52.1

  • 60,0
  • 40,0
  • 20,0

0,0 20,0 40,0 60,0 2010 2011 Q3/11 Q3/12 25,8 18,9 19,3 20,1 0,0 5,0 10,0 15,0 20,0 25,0 30,0 2010 2011 Q3/11 Q3/12

EUR million EUR million %

Earnings per Share (EPS)

0,01 0,38 0,33 0,24 0,31 0,46 0,56 0,19 0,31 0,29 0,29 0,1 0,2 0,3 0,4 0,5 0,6 2010 2011 2012

Q1 Q2 Q3 Q4

EUR

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Personnel R&D Personnel

Key Figures, 1-9/2012

  • 7.9%

354 344 2 634 4 567 12 266 2 000 4 000 6 000 8 000 10 000 12 000 14 000 APAC Finland SA Other Europe NA

at the end of report period at the end of report period

Personnel R&D Expenditures

5,7 6,9 4,8 5,8 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 2010 2011 Q3/11 Q3/12

EUR million at the end of report period

6 685 21 895 20 165 5 000 10 000 15 000 20 000 25 000 2010 2011 Q3/12 120 143 172 20 40 60 80 100 120 140 160 180 200 2010 2011 Q3/12

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Wiring Systems Business Segment

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Key Financials, Wiring Systems

EUR million 1-9/12 1-9/11 1-12/11 Net sales 663.0 252.7 477.2 EBIT before non-recurring items 44.8 28.8 42.5 % of net sales 6.8 11.4 8.9 Non-recurring items 2.9 2.0 7.0 EBIT 41.9 26.7 35.5 EUR million 7-9/12 7-9/11 1-12/11 Net sales 209.2 84.3 477.2 EBIT before non-recurring items 14.2 9.0 42.5 % of net sales 6.8 10.7 8.9 Non-recurring items 1.8 1.9 7.0 EBIT 12.5 7.1 35.5

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Net Sales, Wiring Systems

45,7 78,2 226,6 64,1 90,2 226,8 61,8 84,3 209,2 70,8 224,5 50 100 150 200 250 2010 2011 2012 Q1 Q2 Q3 Q4

EUR million

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SLIDE 20

Adjusted EBIT, Wiring Systems

2,6 10,1 15,2 7,0 9,7 15,4 7,8 9,0 14,2 8,9 13,7 0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0 16,0 18,0 2010 2011 2012

Q1 Q2 Q3 Q4

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Illustrated net of non-recurring items EUR million

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Key Customer Segments

  • Trucks & Buses
  • Light vehicles
  • Engines
  • Recreational Products
  • Agricultural, Forestry and

Construction Equipment

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North America Brazil Europe Medium Trucks Heavy Trucks

PKC Group Truck Market Share Globally

PKC Other

Source: ACT, October 2012; LMC Automotive forecasting Q3/2012. Note: Europe comprised of EU27 + Efta

Class 8 Class 5-7

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Heavy Trucks Production, EU27+ EFTA

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Trucks >16t, units

Source: LMC Automotive forecasting Q3/2012

EURO 6

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Medium Trucks Production, EU27+ EFTA

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Trucks <16t, units

Source: LMC Automotive forecasting Q3/2012

EURO 6

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Heavy Trucks Production, North America

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Trucks >16t, units

Source: LMC Automotive forecasting Q3/2012

EPA 2014

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Medium Trucks Production, North America

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Trucks <16t, units

Source: LMC Automotive forecasting Q3/2012

EPA 2014

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SLIDE 27

Light Vehicle (Pick-up and SUV) Production, North America

27

Units

Source: LMC Automotive forecasting Q3/2012

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Heavy Trucks Production, Brazil

28 Source: LMC Automotive forecasting Q3/2012

Trucks >16t, units

EURO 5 (Brazil)

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Medium Trucks Production, Brazil

29 Source: LMC Automotive forecasting Q3/2012

Trucks <16t, units

EURO 5 (Brazil)

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Electrical Distribution Systems, EDS

  • Electrical Distribution Systems are

responsible for power supply and transfer of information

  • Manufacturing for heavy and light

vehicles, buses, recreational vehicles as well as agricultural, forestry and construction equipment

  • EDS are tailored to the customer-

specific requirements and they must work under all conditions

  • Strong experience in mass producing

product variations (synchro- production)

  • Factories in Brazil, China, Estonia,

Germany, Mexico, Poland, Russia and Ukraine

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30

Batch harnesses Engine harnesses Chassis harnesses Instrument harnesses ABS cable

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Components

  • Manufacturing of plastic components

& connectors, junction boxes and various power distribution centres

  • Key Products

– Power Distribution Centers – Connection Systems – Terminal Systems – Routing and Retention Aids – Fuse boxes

  • Factories in USA, Mexico and Ireland

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Wire & Cable

  • Manufactures and distributes

selected insulated and non-insulated wire, multi-conductor cables and battery cables

  • Key Products

– PVC coated wire – Cross linked polyethylene coated wire – Polyethylene coated wire – Metric and English wire sizes – Battery cable

  • Factory in Mexico

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Electronics Business Segment

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Key Financials, Electronics

EUR million 1-9/12 1-9/11 1-12/11 Net sales 51.6 55.5 73.0 EBIT before non-recurring items 1.2 2.7 2.8 % of net sales 2.3 4.9 3.9 Non-recurring items 0.3 0.2 0.5 EBIT 0.9 2.6 2.4 EUR million 7-9/12 7-9/11 1-12/11 Net sales 18.3 17.7 73.0 EBIT before non-recurring items 1.4 1.7 2.8 % of net sales 7.6 9.8 3.9 Non-recurring items 0.1 0.0 0.5 EBIT 1.3 1.7 2.4

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Net Sales, Electronics

15,1 18,7 15,3 16,9 19,1 18,0 20,5 17,7 18,3 21,1 17,5 5 10 15 20 25 2010 2011 2012

Q1 Q2 Q3 Q4

EUR million

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SLIDE 36

Adjusted EBIT, Electronics

1,3 0,4

  • 0,9

1,1 0,6 0,7 3,3 1,7 1,4 2,0 0,1

  • 1,5
  • 1
  • 0,5

0,5 1 1,5 2 2,5 3 3,5 4 2010 2011 2012

Q1 Q2 Q3 Q4

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Illustrated net of non-recurring items EUR million

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Electronics Segment, 1-9/2012

  • The economic uncertainty and worldwide drop in industrial

investments affected the demand for electronic appliances.

  • Investments in renewable energy and telecommunication testing

equipment picked up from the modest level of the previous quarter.

  • In addition, the volumes of developing and constructing smart

grids as well as energy efficient technologies continued to grow.

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SLIDE 38

Electronics Business

  • Provides design and contract manufacture

services to commercial vehicle, industrial electronics and energy industries

  • Products are used e.g. in power control for

machinery, the testing of electronic products and for energy-saving

  • The service concept includes services

covering the product’s whole life-cycle

  • Innovative design and product

development services in Finland and China

  • Strong experience in the development and

manufacture of automotive electronics and products relating to renewable energy

  • Factories in Finland, China and Russia

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38

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SLIDE 39

Products and Industrial Segments

Products

  • Power supply units
  • Electronics control units
  • Vehicle electronics
  • Testing equipment
  • Electronics service devices
  • Vehicle computers
  • Security products

Industrial Segments

  • Commercial vehicles
  • Energy
  • Industrial electronics
  • Telecommunication
  • Security

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SLIDE 40

Outlook for the Future

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Outlook for the Future

  • PKC expects that its net sales and comparable operating profit

will increase in 2012 from the previous year’s level.

  • Net sales in 2011 amounted to EUR 550.2 million and operating

profit without non-recurring items was EUR 42.6 million.

  • Major part of net sales and profit is generated by the Wiring

Systems business.

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SLIDE 42

Shareholders 30.9.2012

42

8,818 owners

Major shareholders % Ilmarinen Mutual Pension Insurance Company 10.7 AS Harju Elekter 6.4 Project Del Holdings Llc 5.8 Varma Mutual Pension Insurance Company 2.7 Takanen Jorma 2.7 OP-Finland Small Firms Fund 2.4 OP-Focus Non-UCITS Fund 2.2 Laakkonen Mikko 1.9 ODIN Finland 1.7 Eestilä Matti 1.4 Nordea Nordic Small Cap Fund 1.1 Tukinvest Oy 1.0 Mutual Fund Evli Finnish Equity 1.0 Fim Forte Sijoitusrahasto 1.0 Savings Bank Finland Fund 0.8 Total 42.8

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Thank You!

www.pkcgroup.com