PKC Group Oyj - Interim report (Q1 and Q3)

PKC Group Q2/2015: Group EBITDA before non-recurring items up 22%, driven by continued improvement in Wiring Systems segment

  PKC Group Plc       Interim Report          6 August 2015  8.15 a.m.



PKC Group Q2/2015:

Group EBITDA before non-recurring items up 22%, driven by continued improvement
in Wiring Systems segment 



This release is a summary of PKC Group's Interim Report January-June 2015. The
complete report is attached to this release as a pdf-file. It is also available
on the company website at www.pkcgroup.com. 



April - June 2015 highlights

  -- Revenue increased 8.7% on the comparison period (4-6/2014), totalling EUR
     223.9 million (EUR 206.0 million). The changes in consolidation exchange
     rates increased the revenue by approximately +13%.
  -- EBITDA before non-recurring items increased 21.5% on the comparison period
     (4-6/2014), totalling EUR 15.7 million (EUR 12.9 million) and 7.0% (6.3%)
     of revenue.
  -- Wiring Systems business segment's EBITDA before non-recurring items
     increased 22.2% on the comparison period (4-6/2014), totalling EUR 16.5
     million (EUR 13.5 million) and 7.9% (7.1%) of revenue.
  -- Operating profit before non-recurring items increased 33.2% on the
     comparison period (4-6/2014), totalling EUR 8.1 million (EUR 6.1 million)
     and 3.6% (3.0%) of revenue.
  -- Diluted earnings per share were EUR -0.06 (EUR 0.11) including the impact
     of EUR 5.4 million (EUR 1.5 million) non-recurring items in operating
     profit.
  -- Cash flow after investments was EUR 1.6 million (EUR 7.4 million).



January - June 2015 highlights

  -- Revenue increased 9.8% on the comparison period (1-6/2014), totalling EUR
     450.4 million (EUR 410.0 million). The changes in consolidation exchange
     rates increased the revenue by approximately +12%.
  -- EBITDA before non-recurring items increased 31.2% on the comparison period
     (1-6/2014), totalling EUR 32.4 million (EUR 24.7 million) and 7.2% (6.0%)
     of revenue.
  -- Wiring Systems business segment's EBITDA before non-recurring items
     increased 26.4% on the comparison period (1-6/2014), totalling EUR 31.8
     million (EUR 25.2 million) and 7.7% (6.6%) of revenue.
  -- Operating profit before non-recurring items increased 51.2% on the
     comparison period (1-6/2014), totalling EUR 17.3 million (EUR 11.4 million)
     and 3.8% (2.8%) of revenue.
  -- Diluted earnings per share were EUR 0.12 (EUR 0.15) including the impact of
     EUR 5.9 million (EUR 4.2 million) non-recurring items in operating profit.
  -- Cash flow after investments was EUR -30.2 million (EUR -11.0 million).



PKC Group's outlook for 2015

  -- PKC Group estimates that with prevailing exchange rates 2015 revenue will
     be higher than previous year level, and that comparable EBITDA will be
     higher than in 2014. In 2014, PKC's revenue was EUR 829.5 million and
     comparable EBITDA before non-recurring items was EUR 48.6 million*. Revenue
     and EBITDA estimates are based on current business structure.





Key figures*          4-6/15   4-6/14  Change   1-6/15   1-6/14  Change  1-12/14
                                            %                         %         
EUR 1,000 (unless otherwise noted)                                              
Revenue              223,886  205,966    +8.7  450,380  410,023    +9.8  829,516
EBITDA**              15,708   12,926   +21.5   32,441   24,732   +31.2   48,572
% of revenue             7.0      6.3              7.2      6.0              5.9
Operating profit**     8,118    6,095   +33.2   17,268   11,421   +51.2   21,384
% of revenue             3.6      3.0              3.8      2.8              2.6
Non-recurring items   -5,361   -1,465           -5,943   -4,200          -28,362
Operating profit       2,757    4,631   -40.5   11,324    7,221   +56.8   -6,978
 (loss)                                                                         
% of revenue             1.2      2.2              2.5      1.8             -0.8
Profit (loss)          1,397    3,871   -63.9    9,182    5,225   +75.7  -10,528
 before taxes                                                                   
Net profit (loss)     -1,388    2,593  -153.5    2,972    3,501   -15.1  -29,051
 for the report                                                                 
 period                                                                         
Earnings per share     -0.06     0.11  -153.4     0.12     0.15   -15.3    -1.21
 (EPS), EUR                                                                     
Cash flow after        1,550    7,390   -79.0  -30,245  -10,965   175.8   20,699
 investments                                                                    
ROCE,%                                            12.8      7.8              7.7
Gearing, %                                        21.1     14.0             -5.6
Average number of     19,848   19,246    +3.1   19,766   19,026    +3.9   19,640
 personnel                                                                      
* PKC Group has reclassified certain financial items and operating expenses as  
 of the beginning of 2015. Comparison periods have been adjusted accordingly.   
 The changes to revenue and operating profit (loss) are minor and have no impact
 on the net profit (loss) for the period or shareholders' equity. The changes   
 are presented in detail in the table section of the interim report Q1/2015.    
** before non-recurring items                                  





Matti Hyytiäinen, President & CEO:



Revenue in the second quarter increased on the comparison period by 8.7% and
was EUR 223.9 million. In North America and Europe, production of heavy-duty
trucks grew on the comparison period and on the first quarter of the current
year. However, production volumes of medium-duty trucks in North America and in
Europe declined in comparison with both the comparison period and first
quarter. In Brazil, production volumes continued to decline in comparison with
the comparison period but were higher than in the first quarter's holiday
season. 



PKC's operating profit before non-recurring items increased on the comparison
period by 33.2% and was EUR 8.1 million. In North America, the largest
production unit in Acuna, Mexico was hit by a tornado in May causing production
stoppage that had negative impact on the unit's profitability. In Europe, the
ongoing production reorganisation continued to encumber profitability but
progressed as planned apart from some production transfers that have been
delayed due to customers' approval processes. In Brazil despite low production
volumes, actions to improve operating profit are taking effect although
operations remained loss-making. The medium term outlook for truck market in
Brazil is weak and therefore we have decided to close Curitiba factory and
consolidate all production to Campo Alegre factory. 



PKC 2018 strategy is proceeding. The acquisition of Groclin's Wiring & Controls
business that was announced in February has been finalised and business shall
be consolidated into PKC Group as of 1 July 2015. Customers and personnel have
reacted positively to the acquisition. Also the establishment of Chinese joint
venture with Huakai announced in March has proceeded quickly and it is
estimated that the company starts operations in Q3/2015. 



In North America the full-year production volume forecasts for trucks are
slightly weaker than previous estimation. The demand in North America has
stabilised. In Europe, the production volumes in the second half of the year
are estimated to fall slightly short of first half's volumes taking into
account the holiday season production stoppages. In Brazil, production volume
estimates have been further decreased. 



PKC's strong market position is a result of our personnel's commitment to
high-quality customer service. I wish to thank all PKC personnel for their good
performance. 



Market outlook



Wiring Systems Business



In 2015 the production of heavy-duty and medium-duty trucks in Europe is
expected to grow by about 5% compared to previous year's level. 



In 2015 the production of heavy-duty and medium-duty trucks in North America is
expected to increase by about 7%, and production of light vehicles to increase
by about 5% compared to 2014. 



In 2015 the production of heavy-duty and medium-duty trucks in Brazil is
expected to be clearly lower than previous year. The economic and political
uncertainty in Brazil bear a significant risk for Brazilian truck sales to
further drop in 2015. 



Electronics Business



The market demand for Electronics segment's products is expected to remain on
the current level at the most. 



PKC Group Plc

Board of Directors



Matti Hyytiäinen

President & CEO



For additional information, contact:

Matti Hyytiäinen, President & CEO, PKC Group Plc, tel. +358 (0)400 710 968

Juha Torniainen, CFO, PKC Group Plc, tel. +358 (0)40 570 8871



Press conference



A press conference on the interim report will be arranged for analysts and
investors today, 6 August 2015, at 10.00 a.m., at the address Event Arena Bank,
Unioninkatu 20, Helsinki. 



Attachment

PKC interim report Q2 2015



Distribution



Nasdaq Helsinki

Main media

www.pkcgroup.com



PKC Group is a global partner, designing, manufacturing and integrating
electrical distribution systems, electronics and related architecture
components for the commercial vehicle industry, rolling stock manufacturers and
other selected segments. The Group has production facilities in Brazil, China,
Estonia, Finland, Germany, Lithuania, Mexico, Poland, Russia, Serbia and the
USA. The Group's revenue in 2014 totalled EUR 829.5 million. PKC Group Plc is
listed on Nasdaq Helsinki.

Viðhengi:

PKC interim report Q2 2015.pdf