PKC Group Plc Investor Presentation Q1/2012 4 May 2012 Matti Hyytiäinen President & CEO 1
1-3/2012 Highlights Business Environment North American truck production continued to grow. European truck production declined modestly. New emission standards adversely impacted Brazilian truck market. PKC s Operations Technology workshops with customers continued. North American integration progressed as planned. Central European operational improvements on schedule. PKC s Financial Performance Strong cash flow. EBITDA grew >60%. Brazilian operations burdened the profitability. 2
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 242.0 million in 1-3/2012 22,202 employees globally at the end of Q1/2012 (rented employees included) PKC Group Plc is listed in NASDAQ OMX Helsinki Ltd. 3
Growth Through Focused Investments PK Cables listed in the Helsinki Stock Exchange Acquisition of Estonian production Operations started in China Acquisition of MAN business in Poland Acquisition of SEGU in Germany, Poland and Ukraine 1997 1998 2000 2002 2003 2005 2006 2007 2008 2009 2010 2011 Brazilian factory was opened Acquisition of electronics business Acquisition of Russian production Acquisition of Electro Canada in Canada, the USA and Mexico Acquisition of AEES in North America, Brazil and Ireland Adj. EBITDA (1) EUR million Development Over Time (1) Illustrated net of non-recurring items 4
PKC Group s Executive Board as of 4 April 2012 President & CEO Matti Hyytiäinen WIRING SYSTEMS EUROPE & APAC President, WS, Europe & APAC Harri Ojala WIRING SYSTEMS NORTH AMERICA President, WS, North America Frank Sovis WIRING SYSTEMS SOUTH AMERICA President, WS, South America Pekka Korkala* ELECTRONICS President, Electronics Jarmo Rajala BUSINESS DEVELOPMENT Senior Vice President, Business Development Jyrki Keronen FINANCE CFO Marja Sarajärvi** LEGAL & CORPORATE DEVELOPMENT General Counsel Sanna Raatikainen *As of 1 May 2012 **Until 30 June 2012 after which Juha Torniainen 5
PKC locations today North America 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) South America Campo Alegre, Santa Catarina, Brazil (M) Curitiba, Brazil (M) Itajuba, Brazil (M) São Bento do Sul, Brazil (M) São Paulo, Brazil Europe 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) Asia Suzhou, China (M) Wiring Systems business Electronics business (M) Manufacturing 6
Geographical split 7
Key Figures, 1-3/2012 EUR million 1-3/12 1-3/11 Change % 1-12/11 Net sales 242.0 96.9 149.7 550.2 EBITDA 20.4 12.5 63.2 59.5 Depreciation and amortisation 1) 4.2 2.2 90.9 10.5 PPA depreciation and amortisation 3.2 0.6 433.3 7.0 EBIT 13.0 9.7 34.0 42.0 Non-recurring items 0.3 0.0 7.5 EBIT after non-recurring items 12.7 9.7 30.9 34.5 Financial items -2.3-0.3-5.1 Taxes -3.6-1.8-6.0 Net profit 6.9 7.6-9.2 23.4 EPS, (EUR) 0.33 0.38-13.2 1.16 1) Excluding PPA depreciation and amortisation 8
Key Figures, 1-3/2012 EUR million 1-3/12 1-3/11 Change % 1-12/11 Net cash from operating activities 25.9 2.4 979.2 40.0 Cash flows after investments 23.1 0.1 23,000.0-50.2 Net working capital 87.9 57.4 53.1 100.5 Net debt 85.1-4.6 110.7 ROI, % 21.2 28.3 18.9 Equity ratio, % 30.9 52.4 30.0 Gearing, % 52.1-3.8 72.6 No. of employees at closing (Rented employees not included) 21,919 6,407 242.1 21,528 9
Key Figures, 1-3/2012 Net Sales by Geographical Areas EUR, million Net Sales EUR, million Adjusted EBITDA Illustrated net of non-recurring items, EUR million Adjusted EBITDA % and EBIT % Illustrated net of non-recurring items, % 10
Key Figures, 1-3/2012 Net Investments EUR, million Cash Flows After Investments EUR, million Return on Investment (ROI), % Earnings per Share (EPS) % EUR 11
Key Figures, 1-3/2012 Personnel excl. rented employees Personnel incl. rented employees at the end of report period +1.8% at the end of report period R&D Personnel R&D Expenditures EUR, million 12
Wiring Systems Business Segment 13
Key Financials, Wiring Systems 1-3/2012 EUR million 1-3/12 1-3/11 1-12/11 Net sales 226.6 78.2 477.2 EBIT before non-recurring items 15.2 10.1 42.5 % of net sales 6.7 12.9 8.9 Non-recurring items 0.1 0.0 7.0 EBIT 15.0 10.1 35.5 14
Net Sales, Wiring Systems EUR million 15
Adjusted EBIT, Wiring Systems EUR million Illustrated net of non-recurring items 16
Key Customer Segments Trucks & Buses Light vehicles Engines Recreational Products Agricultural, Forestry and Construction Equipment 17
PKC Group Truck Market Share Globally North America Europe South America Heavy Trucks Medium Trucks PKC Other Source: Truck Statistics: LMC Automotive Forecasting, Q1 2012, ACT Forecasting April 2012, Note: Europe comprised of EU27 + Efta, 18
Heavy Truck Production, EU27+ EFTA Trucks >16t, units EURO 6 Source: LMC Automotive forecasting Q1/2012 19
Medium Truck Production, EU27+ EFTA Trucks <16t, units EURO 6 Source: LMC Automotive forecasting Q1/2012 20
Heavy Truck Production, North America Trucks >16t, units EPA 2014 Source: LMC Automotive forecasting Q1/2012 21
Medium Truck Production, North America Trucks <16t, units EPA 2014 Source: LMC Automotive forecasting Q1/2012 22
Light Vehicle (Pick-up and SUV) Production, North America Units Source: LMC Automotive forecasting Q1/2012 23
Heavy Truck Production, South America Trucks >16t, units EURO 5 (Brazil) Source: LMC Automotive forecasting Q1/2012 24
Medium Truck Production, South America Trucks <16t, units EURO 5 (Brazil) Source: LMC Automotive forecasting Q1/2012 25
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 customerspecific requirements and they must work under all conditions Strong experience in mass producing product variations (synchroproduction) Factories in Brazil, China, Estonia, Germany, Mexico, Poland, Russia and Ukraine Batch harnesses Engine harnesses ABS cable Chassis harnesses Instrument harnesses 26
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 27
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 28
Electronics Business Segment 29
Key Financials, Electronics 1-3/2012 EUR million 1-3/12 1-3/11 1-12/11 Net sales 15.3 18.7 73.0 EBIT before non-recurring items -0.9 0.4 2.8 % of net sales -5.7 2.4 3.9 Non-recurring items 0.1 0.0 0.5 EBIT -1.0 0.4 2.4 30
Net Sales, Electronics EUR million 31
Adjusted EBIT, Electronics EUR million Illustrated net of non-recurring items 32
Electronics Segment, 1-3/2012 Demand for the products of PKC Group s key industrial electronics customers decreased during the first quarter of 2012. The weakening was a result of economic uncertainty in Europe and a reduction in wind power energy investments globally. Due to on-going product strategy changes of a telecommunications customer, the demand for PKC s Electronics business design and manufacturing services (ODM) remained significantly lower than the previous year. 33
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 34
Products and Industrial Segments Products Power supply units Electronics control units Vehicle electronics Testing equipment Electronics service devices Industrial Segments Commercial vehicles Energy Industrial electronics Telecommunication Security Vehicle computers Security products 35
Outlook for the Future 36
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. 37
Shareholders 31.3.2012 Major shareholders % Ilmarinen Mutual Pension Insurance Company 11.3 AS Harju Elekter 6.5 Project Del Holdings Llc 5.9 Varma Mutual Pension Insurance Company 2.7 Takanen Jorma 2.7 OP-Finland Small Firms Fund 2.3 Laakkonen Mikko 2.1 ODIN Finland 1.8 Suutari Harri 1.4 Eestilä Matti 1.4 OP-Focus Non-UCITS Fund 1.2 Tukinvest Oy 1.0 FIM Securities Ltd 0.9 Nordea Nordic Small Cap Fund 0.8 Savings Bank Finland Fund 0.8 Total 42.7 8,982 owners 38
Thank You! www.pkcgroup.com 39