2013-10-31 07:15:00 CET
2013-10-31 07:15:02 CET
REGULATED INFORMATION
PKC Group Oyj - Interim report (Q1 and Q3)
PKC GROUP’S INTERIM REPORT 1-9/2013: MAIN MARKETS’ WEAKNESS REFLECTED IN REVENUE AND EBITDA
PKC Group Plc INTERIM REPORT 31 October 2013 8.15 a.m.
PKC GROUP'S INTERIM REPORT 1-9/2013:
MAIN MARKETS' WEAKNESS REFLECTED IN REVENUE AND EBITDA
JULY - SEPTEMBER 2013 HIGHLIGHTS
-- Revenue decreased 7.0% on the comparison period (7-9/2012), totalling EUR
211.6 million (EUR 227.4 million).
-- EBITDA before non-recurring items was EUR 17.0 million (EUR 22.5 million)
and 8.0% (9.9%) of revenue.
-- EBITA** was EUR 12.3 million (EUR 17.9 million) and 5.8% (7.9%) of revenue.
During the report period PPA depreciation and amortisation totalled EUR 2.7
million (EUR 3.5 million).
-- Operating profit before non-recurring items was EUR 9.6 million (EUR 14.4
million) and 4.6% (6.3%) of revenue.
-- Diluted earnings per share were EUR 0.14 (EUR 0.31).
-- Cash flow after investments was EUR 5.1 million (EUR 23.8 million).
JANUARY - SEPTEMBER 2013 HIGHLIGHTS
-- Revenue decreased 5.9% on the comparison period (1-9/2012), totalling EUR
671.9 million (EUR 714.2 million).
-- EBITDA before non-recurring items was EUR 56.4 million (EUR 65.8 million)
and 8.4% (9.2%) of revenue.
-- EBITA** was EUR 42.6 million (EUR 53.2 million) and 6.3% (7.5%) of revenue.
During the report period PPA depreciation and amortisation totalled EUR 8.4
million (EUR 10.6 million).
-- Operating profit before non-recurring items was EUR 34.2 million (EUR 42.6
million) and 5.1% (6.0%) of revenue.
-- Diluted earnings per share were EUR 0.55 (EUR 1.09).
-- Cash flow after investments was EUR 6.4 million (EUR 52.1 million).
REVENUE AND OPERATING PROFIT ESTIMATES FOR 2013 (UNCHANGED)
-- PKC Group's outlook: PKC Group estimates its full year 2013 revenue to be
lower than in 2012 and estimates its comparable operating profit excluding
non-recurring items not to reach 2012 level. In 2012 PKC's revenue was EUR
928.2 million and comparable operating profit excluding non-recurring items
was EUR 51.5 million.
KEY FIGURES 7-9/13 7-9/12 Change 1-9/13 1-9/12 Change 1-12/12
% %
EUR 1,000
(unless otherwise noted)
Revenue 211,616 227,447 -7.0 671,877 714,218 -5.9 928,178
EBITDA* 17,031 22,543 -24.5 56,395 65,781 -14.3 82,954
% of revenue 8.0 9.9 8.4 9.2 8.9
EBITA** 12,345 17,907 -31.1 42,647 53,221 -19.9 65,358
% of revenue 5.8 7.9 6.3 7.5 7.0
Operating profit* 9,636 14,399 -33.1 34,212 42,590 -19.7 51,478
% of revenue 4.6 6.3 5.1 6.0 5.5
Non-recurring items 1,694 1,880 -9.9 8,348 3,159 164.3 8,027
Operating profit 7,942 12,519 -36.6 25,864 39,431 -34.4 43,451
% of revenue 3.8 5.5 3.8 5.5 4.7
Profit before taxes 5,542 9,784 -43.4 19,620 34,248 -42.7 34,946
Net profit for the 3,013 6,666 -54.8 12,164 23,291 -47.8 23,999
report period
Earnings per share 0.14 0.31 -54.8 0.55 1.09 -49.5 1.12
(EPS), EUR
Cash flow after 5,115 23,779 -78.5 6,428 52,084 -87.7 63,673
investments
ROI,% 15.2 20.1 16.7
Gearing, % 9.0 42.0 34.4
Average number of 18,788 19,840 -5.3 19,292 20,931 -7.8 20,590
personnel
* before non-recurring items
** operating profit before PPA depreciation and amortisation and non-recurring
items
MATTI HYYTIÄINEN, PRESIDENT & CEO:
Truck production volumes during the first nine months fell short from last
year's comparison period production volumes in our main markets in North
America and Europe. Actual production in Europe during the third quarter
remained in the level of previous quarter. In North America truck production
volumes began to fall contrary to forecasts in the third quarter and remained
below previous quarter's production volumes.
PKC's revenue in the third quarter was EUR 211.6 million and operating profit
before non-recurring items EUR 9.6 million. The weakening of operating profit
margin is explained by extra expenses related to production transfers and
ramp-up of new customer programs in Europe. Operating profit also continued to
be burdened by losses in Brazilian operations. In Brazil, production volumes
for trucks continued to grow during the third quarter. Despite the increased
production volumes, we were still able to reduce the number of personnel in
Brazil and thus to improve efficiency. On the other hand the significant
depreciation of Brazilian real during the third quarter had a negative impact
on material expenses. In addition, as previously announced, the unit cost of
employees in Brazil increased during the third quarter due to new collective
labour agreement.
Production forecasts for the whole year have been raised moderately in Europe
and significantly in Brazil. On the other hand, the whole year production
forecast in North America has been lowered. Actual production in North America
turned into decline in the third quarter and the last quarter production is
estimated to be at the level of third quarter at the most. 60% of PKC's revenue
is generated in North America and the development of this market during the
rest of the year has substantial influence to PKC's operating profit level for
the whole year.
In Electronics business, the measures improving cost-competitiveness and the
increased share of ODM products in the product mix have improved segment's
operating profit this year. Sales activities for electronics business's own
products, which include testing products for mobile devices, other electronic
equipment using touch-screen technology and lightning protection system
devices, have been high during the third quarter and customer feedback has been
promising.
In September, we signed a Framework Agreement for Strategic Cooperation with
Sinotruk for a joint venture company in China, which would manufacture wiring
systems for Sinotruk and potentially other customers in China as well as for
export. Sinotruk is one of the leading companies in heavy duty truck industry
in China with a market share of about 15%. The intention of Sinotruk and PKC is
to negotiate on the establishment of the joint venture company, so that it
could start operations within the first half of 2014.
With regard to the implementation of our strategy, it is essential that we have
a strong balance sheet and sufficient funds available for growth projects.
During the period, we implemented a directed share issue and raised EUR 44.94
million before commissions and expenses. We also issued a EUR 100 million bond.
Both issues were oversubscribed, which indicates investors' confidence in the
company and its growth strategy.
After the report period, PKC has published its decision to establish a new
wiring systems factory in Smederevo, Serbia and signing of the memorandum of
Understanding related thereto with the Republic of Serbia and City of
Smederevo. The factory's purpose is to serve existing and potential new
customers in Europe.
The cornerstones of PKC's customer service are the zero-defect products and
on-time deliveries. I would once again like to thank all our employees for
their successful work during the period.
MARKET OUTLOOK
European heavy truck production in 2013 is estimated to decrease by about 1%
compared to 2012 and medium truck production to remain unchanged compared to
2012 level. The overall economic uncertainty is estimated to keep the
commercial vehicle demand in Europe at a lower level. However, the production
volumes are estimated to increase due to transition to Euro 6 emission standard
in the last quarter.
North American heavy duty truck production is estimated to decrease by 10%,
medium duty truck production to increase 7% and light vehicle production to
increase by 5% from 2012 level. It is estimated that the last quarter
production volumes of heavy trucks will at the most remain on previous
quarter's level.
Brazilian heavy duty truck production is estimated to increase by 47% and
medium duty truck production by 66% compared to 2012. The governmental
incentive program to support the purchase of new trucks is currently valid
until the end of 2013.
PKC's market outlook is further impacted by some light vehicle and component
programs that are near end-of-life-cycle and will be ramped-down in 2013.
The demand of industrial electronic and telecommunications sector appliances is
estimated to remain at the previous level. Volumes of renewable-energy and
energy saving products including smart grid solutions are expected to increase
slightly.
PKC GROUP'S OUTLOOK
PKC Group estimates its full year 2013 revenue to be lower than in 2012 and
estimates its comparable operating profit excluding non-recurring items not to
reach 2012 level. In 2012 PKC's revenue was EUR 928.2 million and comparable
operating profit excluding non-recurring items was EUR 51.5 million.
DISCLOSING PROCEDURES OF FINANCIAL REVIEWS
PKC Group Plc follows the disclosure procedure enabled by Standard 5.2b
published by the Finnish Financial Supervision Authority, and discloses
relevant information related to its Interim Report with this release. PKC's
Interim Report for January-September 2013 is attached to this release and is
also available on company's website at www.pkcgroup.com.
PKC GROUP PLC
Board of Directors
Matti Hyytiäinen
President & CEO
For additional information, contact:
Matti Hyytiäinen, President & CEO, PKC Group Plc, +358 400 710 968
PRESS CONFERENCE
A press conference on the interim report will be arranged for analysts and
investors today, 31 October 2013, at 10.00 a.m., at the address Event Arena
Bank, Unioninkatu 20, Helsinki.
ATTACHMENT
PKC Interim Report Q3 2013
DISTRIBUTION
NASDAQ OMX
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 and other selected segments. The
Group has production facilities in Brazil, China, Estonia, Finland, Germany,
Mexico, Poland, Russia and the USA. The Group's revenue in 2012 totalled EUR
928.2 million. PKC Group Plc is listed on NASDAQ OMX Helsinki Ltd.
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