PKC Group Plc Investor Presentation Q2/2012 9 August 2012 Matti - - PowerPoint PPT Presentation

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PKC Group Plc

Investor Presentation Q2/2012

9 August 2012 Matti Hyytiäinen President & CEO

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PKC’s Operations Business Environment

4-6/2012 Highlights

• Truck production in all markets remained in

the same level as Q1/2012.

• North America H2/2012 production volume

estimations were lowered. New measures implemented by Brazilian government to improve truck sales. North American integration was finished ahead of the schedule. New sales and design office was opened in Munich, Germany.

• Production transfers were rescheduled in

Brazil.

PKC’s Financial Performance

Cash flow from operations continued on a positive path. Improved EBITDA % and EBIT %. Electronics back to positive EBIT.

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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

486.8 million in 1-6/2012

• 20,970 employees globally at the end of

Q2/2012 (rented employees included)

• PKC Group Plc is listed in NASDAQ OMX

Helsinki Ltd.

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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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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

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)

Geographical split

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Key Figures, 1-6/2012

EUR million 1-6/12 1-6/11 Change % 1-12/11 Net sales 486.8 206.2 136.1 550.2 EBITDA 43.2 25.0 72.8 59.5 Depreciation and amortisation1) 7.9 4.9 61.2 10.5 PPA depreciation and amortisation 7.1 1.2 491.7 7.0 EBIT 28.2 18.9 49.2 42.0 Non-recurring items 1.3 2.2

• 40.9

7.5 EBIT after non-recurring items 26.9 16.7 61.1 34.5 Financial items

• 2.4

0.3

• 5.1

Taxes

• 7.8
• 3.2
• 6.0

Net profit 16.6 13.9 19.4 23.4 EPS, (EUR) 0.78 0.69 13.0 1.16

1) Excluding PPA depreciation and amortisation

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Key Figures, 4-6/2012

EUR million 4-6/12 4-6/11 Change % 1-12/11 Net sales 244.8 109.3 124.0 550.2 EBITDA 22.9 12.5 83.2 59.5 Depreciation and amortisation1) 3.7 2.6 42.3 10.5 PPA depreciation and amortisation 4.0 0.7 471.4 7.0 EBIT 15.2 9.3 63.4 42.0 Non-recurring items 1.0 2.2

• 54.5

7.5 EBIT after non-recurring items 14.2 7.1 100.0 34.5 Financial items

• 0.2

0.6

• 5.1

Taxes

• 4.3
• 1.4
• 6.0

Net profit 9.7 6.3 54.0 23.4 EPS, (EUR) 0.46 0.31 48.4 1.16

1) Excluding PPA depreciation and amortisation

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Key Figures, 1-6/2012

EUR million 1-6/12 1-6/11 Change % 1-12/11 Net cash from operating activities 35.3 8.8 301.1 40.0 Cash flows after investments 28.3

• 9.1
• 50.2

Net working capital 96.7 73.6 31.4 100.5 Net debt 93.4 18.7 110.7 ROI, % 23.0 27.7 18.9 Equity ratio, % 31.2 54.3 30.0 Gearing, % 57.9 14.8 72.6

• No. of employees at closing (Rented

employees included) 20,970 8,732 140.2 21,895

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

Key Figures, 1-6/2012

EUR million Illustrated net of non-recurring items, %

Adjusted EBITDA

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

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

Key Figures, 1-6/2012

EUR million EUR million %

Earnings per Share (EPS)

EUR

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Personnel incl. rented employees R&D Personnel

Key Figures, 1-6/2012

• 4.2%

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

Personnel incl. rented employees R&D Expenditures

5.7 6.9 3.2 4.1 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 2010 2011 Q2/11 Q2/12

EUR million at the end of report period

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Wiring Systems Business Segment

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Key Financials, Wiring Systems 1-6/2012

EUR million 1-6/12 1-6/11 1-12/11 Net sales 453.4 168.3 477.2 EBIT before non-recurring items 30.6 19.8 42.5 % of net sales 6.7 11.7 8.9 Non-recurring items 1.1 0.1 7.0 EBIT 29.4 19.7 35.5

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Key Financials, Wiring Systems 4-6/2012

EUR million 4-6/12 4-6/11 1-12/11 Net sales 226.8 90.2 477.2 EBIT before non-recurring items 15.4 9.7 42.5 % of net sales 6.8 10.7 8.9 Non-recurring items 1.0 0.1 7.0 EBIT 14.4 9.6 35.5

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Net Sales, Wiring Systems

EUR million

Adjusted EBIT, Wiring Systems

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Illustrated net of non-recurring items EUR million

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 Build History, July 2012; LMC Automotive forecasting Q2/2012. Note: Europe comprised of EU27 + Efta

Class 8 Class 5-7

Heavy Trucks Production, EU27+ EFTA

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Trucks >16t, units

Source: LMC Automotive forecasting Q2/2012

EURO 6

Medium Trucks Production, EU27+ EFTA

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Trucks <16t, units

Source: LMC Automotive forecasting Q2/2012

EURO 6

Heavy Trucks Production, North America

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Trucks >16t, units

Source: LMC Automotive forecasting Q2/2012

EPA 2014

Medium Trucks Production, North America

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Trucks <16t, units

Source: LMC Automotive forecasting Q1/2012

EPA 2014

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

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Units

Source: LMC Automotive forecasting Q2/2012

Heavy Trucks Production, Brazil

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Trucks >16t, units

EURO 5 (Brazil)

Medium Trucks Production, Brazil

27 Source: LMC Automotive forecasting Q2/2012

Trucks <16t, units

EURO 5 (Brazil)

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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Batch harnesses Engine harnesses Chassis harnesses Instrument harnesses ABS cable

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 1-6/2012

EUR million 1-6/12 1-6/11 1-12/11 Net sales 33.3 37.9 73.0 EBIT before non-recurring items

• 0.2

1.0 2.8 % of net sales

• 0.6

2.6 3.9 Non-recurring items 0.1 0.2 0.5 EBIT

• 0.3

0.8 2.4

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Key Financials, Electronics 4-6/2012

EUR million 4-6/12 4-6/11 1-12/11 Net sales 18.0 19.1 73.0 EBIT before non-recurring items 0.7 0.5 2.8 % of net sales 3.7 2.8 3.9 Non-recurring items 0.0 0.2 0.5 EBIT 0.7 0.4 2.4

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Net Sales, Electronics

EUR million

Adjusted EBIT, Electronics

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Illustrated net of non-recurring items EUR million

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Electronics Segment, 1-6/2012

• The economic uncertainty and worldwide drop in industrial

investments affected the demand for electronic appliances.

• Investments in renewable energy and telecommunication testing

equipment remained on the same modest level as during the first quarter of 2012.

• However, the volumes of developing and constructing smart

grids were at a good level.

• Also the demand for energy efficient technologies and products

grew during the second quarter.

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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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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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.

Shareholders 30.6.2012

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8,976 owners

Major shareholders % Ilmarinen Mutual Pension Insurance Company 10.7 AS Harju Elekter 6.5 Project Del Holdings Llc 5.8 Varma Mutual Pension Insurance Company 2.7 Takanen Jorma 2.7 OP-Finland Small Firms Fund 2.3 Laakkonen Mikko 2.0 OP-Focus Non-UCITS Fund 1.9 ODIN Finland 1.7 Suutari Harri 1.4 Eestilä Matti 1.4 Tukinvest Oy 1.0 FIM Forte Sijoitusrahasto 1.0 Nordea Nordic Small Cap Fund 0.8 Savings Bank Finland Fund 0.8 Total 42.7

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Thank You!

www.pkcgroup.com