2009-10-29 07:15:00 CET
2009-10-29 07:15:02 CET
REGULATED INFORMATION
PKC Group Oyj - Interim report (Q1 and Q3)
PKC GROUP'S INTERIM REPORT JANUARY-SEPTEMBER/2009
PKC Group Oyj INTERIM REPORT 29 OCTOBER 2009 8.15 a.m. PKC GROUP'S INTERIM REPORT JANUARY-SEPTEMBER/2009 PKC Group's net sales in the January-September period decreased by 40.7% from the previous year to EUR 146.4 million (EUR 247.0 million). Operating profit was EUR 2.0 million negative (25.0 million positive) and profit before taxes was EUR 0.7 million negative (22.7 million positive). Earnings per share were EUR 0.05 negative (0.84 positive). The result is burdened by approximately EUR 5.0 million in non-recurring expenses. Cash flows after investing activities during the report period were EUR 31.4 million (20.2 million). HARRI SUUTARI, PRESIDENT AND CEO: "The production volumes of the truck industry remained at about a third of the last year's level. The demand for electronics design and manufacturing services in the market weakened for about a fourth compared to last year. Despite the heavy reduction of the market, PKC Group's profitability has returned to a satisfactory level during the third quarter due to the executed rationalisation measures. Continued rationalisation measures and inputs in R&D puts trust in the continuous improvement of PKC's competitive position. Due to the current market situation, the supplier base in the commercial vehicle industry is going through radical changes, in turn opening up new possibilities for PKC." OPERATING ENVIRONMENT Wiring Harnesses business The deliveries and new orders of heavy trucks saw a very sharp decline during the first nine months of the year in all of our market areas in comparison to the previous year. In Europe, our main market, the volume of deliveries and the value of the new orders received by our customers reached only a third of what it had been a year earlier. The amount of order bookings falling short by a third in comparison to delivery volumes indicates that the situation in Europe continues to weaken. In South America, deliveries and new orders fell by about a third in comparison to the previous year. The order bookings exceeded cumulatively the delivery volumes, which indicates that the markets in Latin America are recovering. In North America both the volume of deliveries and the new orders received by our customers reached only a half of what it had been a year earlier. Order bookings were almost at the level of the deliveries. North American truck industry has only a minor impact on PKC Group's business. Deliveries for the machinery industry in Europe reached approximately two-fifths compared to the previous year. The production and deliveries of recreational products were halved in North America. PKC is participating in several competitive bid processes concerning new customer relationships. Success in these processes might lead to new long-term delivery relationships and the subsequent strengthening of the company's market position. Electronics business Except for the Asian market, the industrial investments decreased substantially, and the Group's industrial electronics deliveries were cut by about a fourth. NET SALES AND FINANCIAL PERFORMANCE July-September 2009 Consolidated net sales from July-September amounted to EUR 46.8 million (73.4 million), down 36.2% when compared to the same period a year earlier. Consolidated operating profit totalled EUR 3.6 million (6.0 million), accounting for 7.6% of net sales (8.2%). Depreciations amounted to EUR 2.9 million (2.1 million). Financial income and expenses were EUR 2.1 million positive (0.5 million negative). Profit before taxes was EUR 5.7 million (5.5 million). Profit for the report period totalled EUR 6.5 million (3.0 million). Recognised deferred tax assets related to the confirmed losses of group companies from previous years totalled EUR 1.7 million. Earnings per share were EUR 0.36 (0.17). A total of EUR 0.2 million in non-recurring expenses arising from reorganisation of operations was recorded in the third quarter of the year. January-September 2009 Consolidated net sales from January-September amounted to EUR 146.4 million (247.0 million), down 40.7% on the same period a year earlier. Consolidated operating profit totalled EUR 2.0 million negative (25.0 million positive), accounting for 1.3% negative of net sales (10.1% positive). Depreciations amounted to EUR 8.4 million (6.1 million). Financial income and expenses were EUR 1.2 million positive (2.3 million negative). Profit before taxes was EUR 0.7 million negative (22.7 million positive). Profit for the report period totalled EUR 0.9 million negative (15.0 million positive). Earnings per share were EUR 0.05 negative (0.84 positive). Net sales generated by the Wiring Harnesses business in the report period amounted to EUR 109.0 million (195.7 million), or 44.3% less than in the comparative period. The segment's share of consolidated net sales was 74.4% (79.2%). It generated an operating profit of EUR 4.9 million negative (16.0 million positive), equivalent to 4.5% negative of the segment's net sales (8.2% positive). The result of the Wiring Harnesses business was burdened in total by EUR 5.0 million in non-recurring rationalisation expenses. Net sales generated by the Electronics business decreased by 27.0% to EUR 37.4 million positive (51.3 million positive). The segment's share of consolidated net sales was 25.6% (20.8%). It generated an operating profit of EUR 2.9 million positive (9.0 million positive), equivalent to 7.8% of the segment's net sales (17.6%). BALANCE SHEET AND FINANCING Consolidated total assets as at 30 September 2009 stood at EUR 160.0 million (180.6 million). Interest-bearing liabilities totalled EUR 47.9 million at the close of the report period (49.2 million). The Group's equity ratio was 46.7% (50.0%). Net liabilities totalled EUR 30.8 million (33.9 million) and gearing was 41.3% (37.6%). Inventories amounted to EUR 36.0 million (48.0 million). Current receivables totalled EUR 43.9 million (69.1 million). Cash flows after investing activities during the report period were EUR 31.4 million (20.2 million). Cash in hand and at the bank amounted to EUR 17.1 million (15.3 million). The annual general meeting held on 27 March 2009 decided to pay a dividend of 0.15 per share, a total of approximately EUR 2.7 million. The payment date for dividends was 8 April 2009. CAPITAL EXPENDITURES During the report period, the Group's gross capital expenditures totalled EUR 3.7 million (5.2 million), representing 2.5% of net sales (2.1%). Capital expenditures consisted mostly of the acquisition of production machinery and equipment. The integration of the North America's business operations has been completed with the implementation of the Group's ERP system. The ERP system has also been taken into use at the Poland unit. RESEARCH AND DEVELOPMENT Research and development expenditure totalled EUR 4.1 million (4.4 million), representing 2.8% (1.8%) of consolidated net sales. At the end of the report period, 109 (109) people were employed in product development. PERSONNEL During the report period, the Group had an average payroll of 4,580 employees (5,636). At the end of the report period, the Group's personnel numbered 4,205 employees (5,573), of whom 3,682 (4,812) worked abroad and 523 (728) in Finland. Personnel cuts have been made at various units within the Group. A total of EUR 2.6 million in non-recurring expenses arising from the termination of employee contracts was recorded during the report period. As a result of the co-determination negotiations concluded in January 2009, it was decided to temporarily lay off almost the entire personnel of PKC Group Oyj's Kempele unit, a total of 250 people, with the duration of the layoffs varying between a week and longer periods, as well as 60 employees at PKC Electronics Oy's Raahe factory for a maximum of three months. As a result of the co-determination negotiations concluded in May 2009, it was decided to terminate the employment contracts of 128 employees of the PKC Group Oyj's Kempele unit in phases. As a result of the co-determination negotiations concluded in June 2009, it was decided to temporarily lay off approximately 45 employees at the PKC Group Oyj's Kempele unit. The temporary layoffs were a continuation of the co-determination negotiations concluded in January and the duration of the layoffs varies from one to six weeks per employee. The temporary layoffs will be carried out by the end of December. As a result of the co-determination negotiations concluded in August 2009, it was decided to temporarily lay off 60 PKC Electronics employees. The temporary layoffs will be carried out in phases by the end of December. QUALITY AND THE ENVIRONMENT The Group's Wiring Harnesses business operations have, except for the Poland unit, been certified in accordance with the ISO/TS 16949 and ISO 9001 quality standards as well as the ISO 14001 environment standard. The Curitiba production unit is additionally certified under the OHSAS 18001 Occupational Health and Safety standard. The ISO 9001 standard requirements have been updated to conform to the new standard version during the periodical evaluations finished during the report period. The certification process of the wiring harness factory in Poland is proceeding as planned, and the ISO 9001 and ISO 14001 certification audits will be carried out outside of the report period during the last quarter. The ISO/TS 16949 system certification audits are planned for the first quarter of 2010. The Group's Electronics business operations have been certified in accordance with the ISO 9001 and ISO 14001 standards. Preparation for the adoption and certification of the ISO/TS 16949 standard continues as planned. The first phase of the Raahe factory certification audit has been carried out during the report period, and the certification audit will be completed for the Raahe factory during the last quarter. Best quality practices are utilised in the wiring harnesses business. The best quality practices include different tried and tested quality tools and operating methods. During the report period, the best quality practices were audited internally, and the audit procedures have been specified. Progress is actively being monitored by the Group's Executive Board and discussed during external system audits. MANAGEMENT AND GROUP STRUCTURE The Annual General Meeting re-elected Endel Palla, Olli Pohjanvirta, Matti Ruotsala and Jyrki Tähtinen to seat on the Board of Directors. Outi Lampela was elected as a new member to the Board. At its organisation meeting, the Board of Directors elected Matti Ruotsala as the Chairman and Jyrki Tähtinen as the Vice Chairman. The Authorised Public Accountant Firm Ernst & Young Oy will continue as the company's auditor, with Juhani Rönkkö, Authorised Public Accountant, acting as the principal auditor. The PKC Group Oyj's Board of Directors resolved on 30 April 2009 to appoint an auditing committee among its members. Outi Lampela was nominated as the Chairman and Olli Pohjanvirta as a member of the Audit Committee. PKC Group Oyj's Executive Board member's, Pekka Korkala's, Vice President responsible for the production and marketing of Wiring Harnesses, employment relationship has ended 8 September 2009. PKC has resolved to reorganise its wiring harness business into a separate sub-group. The reorganisation shall be implemented on 1 November 2009. The aim is to streamline the operations and to create better opportunities for the continued development of the business. The managing director of the wiring harnesses business subgroup's parent company to be recruited, shall have the overall responsibility for the group-wide wiring harnesses business. SHARE TURNOVER AND SHAREHOLDERS PKC Group Oyj's share turnover on NASDAQ OMX Helsinki Oy from 1 January to 30 September 2009 was 6,552,829 shares (9,460,643 shares), representing 36.0% of the average number of shares (53.2%). Shares were traded to a total value of EUR 25.3 million (71.8 million). The lowest share value during the report period was EUR 2.70 (6.57) and the highest EUR 5.75 (9.48). The closing price on the last trading day of the report period was EUR 5.11 (6.60) and the average price during the period was EUR 3.89 (7.59). The company's market capitalisation on 30 September 2009 was EUR 90.9 million (117.4 million). The shares held by Board members, related individuals and corporations in which they have a controlling interest accounted for 0.7% (2.3%) of the total number of shares at the end of the report period. PKC Group Oyj had 7,656 shareholders (7,401) at the end of the report period. The proportion of shares held by foreigners and by way of nominee registrations at the close of the report period was 15.5% of the shares outstanding (24.4%). SHARE CAPITAL The Board of Directors was granted authorisation by the Annual General Meeting on 29 March 2007 to decide on one or more share issues and the granting of special rights as defined in Chapter 10, Section 1 of the Companies Act and on all the terms and conditions thereof. A maximum total of 3,500,000 shares may be issued, or subscribed to, based on authorisation. The authorisation includes the right to decide on a directed share issue and shall remain in force for five years from the date of the resolution of the Annual General Meeting. The authorisation may be used at the Board's discretion for financing corporate acquisitions, for carrying out inter-company co-operation or similar arrangements, or for strengthening the company's financing and capital structure. The Board of Directors does not possess the valid authorisation to acquire the company's own shares, in which the company does not have any own shares (treasury shares) in its possession. STOCK OPTION SCHEMES In 2006, PKC launched a stock option scheme according to which the maximum total number of stock options to be issued is 697,500, in which they are divided into A, B and C warrants. At the close of the report period, the company's key personnel had a total of 202,500 2006A warrants, 193,520 2006B warrants and 219,840 2006C warrants in their possession. The subscription period for shares through the exercise of stock options granted under the 2006 scheme shall be from 2009-2013. The share subscription price for stock options shall be the volume-weighted average price of the PKC Group Oyj share on NASDAQ OMX Helsinki, with dividend adjustments, as defined in the stock option terms (at present, EUR 10.49 for the 2006A, 2006B and 2006C warrants). Through the exercise of the 2006 stock options, the share capital of PKC Group Oyj may be increased by a maximum total of 697,500 new shares and EUR 234,673.67. The 2006 stock options are subject to a share ownership plan. Key personnel are obligated to subscribe to or purchase the company's shares with 20% of the gross income earned from stock options and to own these shares for two years. The company's President and CEO is obligated to own these shares for the duration of his managerial contract. The Annual General Meeting that was held on 27 March 2009 resolved to issue stock options to the key personnel of the Company and its subsidiaries. The maximum total number of stock options issued will be 600,000 and they are divided into A, B and C options. At the end of the report period, key personnel held a total of 151,500 2009A options. The share subscription price for shares through the exercise of stock options granted under the 2009 scheme shall be the volume-weighted average price for PKC Group's shares during April 2009, 2010 and 2011 on NASDAQ OMX Helsinki Oy + 20% (for 2009A options, the current price is EUR 3.85). The amount of the dividend decided after the period for the determination of the share subscription price, but before shares are subscribed for, shall be deducted from the share subscription price of the stock options on each dividend record date. The share subscription price will be recorded in the invested non-restricted equity fund. The stock options entitle their owners to subscribe to a maximum total of 600,000 new shares in the company or existing shares held by the company. The share subscription period for 2009A stock options will be 1 April 2012 — 30 April 2014, for 2009B stock options 1 April 2013 — 30 April 2015 and for 2009C stock options 1 April 2014 — 30 April 2016. SHORT-TERM RISKS AND UNCERTAINTIES The development of commercial vehicle industry in the near future in Europe has especially significant effect on PKC's wiring harnesses business's result. The start of growth requires positive and stable increase of Pan European national income. Other main uncertainties include price pressures on our final products, the significant fluctuation of currency exchange rates as well as the impact of the financial crisis on suppliers and the availability of raw materials and components. The principles, objectives and organisation of the company's risk management as well as key risk areas are described in the risk management section of the Corporate Governance guidelines, which are available on the company's website, www.pkcgroup.com. OUTLOOK FOR THE FUTURE It is currently difficult to estimate how long the economic downturn will last. We estimate that the low predictability in the demand in commercial vehicle industry and general uncertainty of financing will keep the demand for wiring harnesses exceptionally low. We also estimate that demand for electronics design and manufacturing services in the market will weaken compared to last year. We predict that the full-year net sales will decrease substantially and for operating profit to be negative. The full year estimation contains significantly more uncertainty than usual due to the customer segments' exceptionally short outlooks. Thanks to the low need for capital expenditures and decrease of working capital, cash flows after investments are expected to be positive. PKC's balance sheet, liquidity and good customer relationships all enable improvement in PKC's relative competitive position. TABLES -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF | 7-9/09 | 7-9/08 | 1-9/09 | 1-9/08 | 1-12/08 | | COMPREHENSIVE INCOME (1000 | 3 mon. | 3 mon. | 6 mon. | 6 mon. | 12 mon. | | EUR) | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | 46,842 | 73,372 | 146,424 | 247,033 | 311,713 | -------------------------------------------------------------------------------- | Other operating income | 398 | 279 | 1,500 | 888 | 1,304 | -------------------------------------------------------------------------------- | Increase (+) / decrease (-) | -28 | 905 | -8,021 | -1,782 | 71 | | in stocks of finished goods | | | | | | | and work in progress | | | | | | -------------------------------------------------------------------------------- | Materials and services | 25,563 | 41,778 | 77,003 | 133,895 | 172,198 | -------------------------------------------------------------------------------- | Employee benefits expenses | 11,570 | 17,279 | 39,855 | 57,665 | 76,049 | -------------------------------------------------------------------------------- | Depreciation | 2,901 | 2,076 | 8,376 | 6,094 | 8,177 | -------------------------------------------------------------------------------- | Impairment loss for | 0 | 0 | 0 | 0 | 1,197 | | goodwill | | | | | | -------------------------------------------------------------------------------- | Other operating expenses | 3,626 | 7,423 | 16,620 | 23,518 | 34,427 | -------------------------------------------------------------------------------- | OPERATING PROFIT/LOSS | 3,550 | 6,000 | -1,950 | 24,967 | 21,039 | -------------------------------------------------------------------------------- | Financial income | 2,650 | -323 | 9,420 | 2,211 | 8,406 | -------------------------------------------------------------------------------- | Financial expenses | -504 | -133 | -8 192 | -4,519 | -14,217 | -------------------------------------------------------------------------------- | PROFIT/LOSS BEFORE TAXES | 5,696 | 5,543 | -721 | 22,660 | 15,228 | -------------------------------------------------------------------------------- | Income tax expense | 776 | -2,565 | -175 | -7,629 | -9,661 | -------------------------------------------------------------------------------- | PROFIT/LOSS FOR THE REPORT | 6,470 | 2,978 | -896 | 15,031 | 5,567 | | PERIOD | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other comprehensive income: | | | | | | -------------------------------------------------------------------------------- | Exchange differences on | -153 | 552 | -619 | 10 | -1,500 | | translating foreign | | | | | | | operations | | | | | | -------------------------------------------------------------------------------- | Total comprehensive income | 6,319 | 3,531 | -1,515 | 15,041 | 4,067 | | for the period: | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/loss attributable | | | | | | | to: | | | | | | -------------------------------------------------------------------------------- | Shareholders of the parent | 6,471 | 3,054 | -896 | 14,993 | -3,252 | | company | | | | | | -------------------------------------------------------------------------------- | Minority interest | 0 | 76 | 0 | -38 | 0 | -------------------------------------------------------------------------------- | Total | 6,471 | 2,978 | -896 | 15,031 | -3,252 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | From profit/loss | | | | | | | attributable to | | | | | | | shareholders of the parent | | | | | | | company | | | | | | -------------------------------------------------------------------------------- | Basic earnings per share | 0.36 | 0.17 | -0.05 | 0.84 | 0.31 | | (EPS), EUR | | | | | | -------------------------------------------------------------------------------- | Diluted earnings per share | 0.39 | 0.18 | -0.05 | 0.87 | 0.31 | | (EPS), EUR | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF FINANCIAL | 9/09 | 9/08 | 12/08 | | POSITION (1000 EUR) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | NON-CURRENT ASSETS | | | | -------------------------------------------------------------------------------- | Goodwill | 9,461 | 6,242 | 9,481 | -------------------------------------------------------------------------------- | Other intangible assets | 12,687 | 3,330 | 14,694 | -------------------------------------------------------------------------------- | Tangible assets | 35,924 | 34,204 | 34,931 | -------------------------------------------------------------------------------- | Deferred tax assets | 4,432 | 4,088 | 1,623 | -------------------------------------------------------------------------------- | Other receivables | 62 | 418 | 453 | -------------------------------------------------------------------------------- | Non-current assets total | 62,566 | 48,281 | 61,182 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CURRENT ASSSETS | | | | -------------------------------------------------------------------------------- | Inventory | 36,026 | 47,951 | 51,815 | -------------------------------------------------------------------------------- | Receivables | | | | -------------------------------------------------------------------------------- | Trade receivables | 32,649 | 61,112 | 47,025 | -------------------------------------------------------------------------------- | Other receivables | 11,267 | 8,007 | 14,948 | -------------------------------------------------------------------------------- | Receivables total | 43,916 | 69,119 | 61,973 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 17,090 | 15,252 | 12,468 | -------------------------------------------------------------------------------- | Current assets total | 97,033 | 132,321 | 126,256 | -------------------------------------------------------------------------------- | ASSETS TOTAL | 159,599 | 180,603 | 187,437 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- | EQUITY | | | | -------------------------------------------------------------------------------- | Share capital | 5,983 | 5,983 | 5,983 | -------------------------------------------------------------------------------- | Share premium account | 4,862 | 4,862 | 4,862 | -------------------------------------------------------------------------------- | Reserve fund | 370 | 370 | 370 | -------------------------------------------------------------------------------- | Translation difference | -2,183 | -252 | -1,841 | -------------------------------------------------------------------------------- | Share-based payments | 1,009 | 1,156 | 808 | -------------------------------------------------------------------------------- | Retained earnings | 65,450 | 62,923 | 62,557 | -------------------------------------------------------------------------------- | Profit/loss for the report period | -896 | 14,993 | 5,519 | -------------------------------------------------------------------------------- | Minority interest | 0 | 318 | 328 | -------------------------------------------------------------------------------- | EQUITY TOTAL | 74,594 | 90,354 | 78,586 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES | | | | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 31,423 | 16,210 | 40,120 | -------------------------------------------------------------------------------- | Non-interest-bearing liabilities | | | | -------------------------------------------------------------------------------- | Provisions | 390 | 135 | 216 | -------------------------------------------------------------------------------- | Deferred tax liabilities | 3,576 | 755 | 3,461 | -------------------------------------------------------------------------------- | Non-current liabilities total | 35,388 | 17,100 | 43,797 | -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 16,438 | 32,973 | 31,866 | -------------------------------------------------------------------------------- | Trade payables | 14,507 | 23,252 | 14,907 | -------------------------------------------------------------------------------- | Other liabilities | 18,672 | 16,924 | 18,281 | -------------------------------------------------------------------------------- | Current liabilities total | 49,617 | 73,149 | 65,055 | -------------------------------------------------------------------------------- | Liabilities total | 85,005 | 90,249 | 108,851 | -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES TOTAL | 159,599 | 180,603 | 187,437 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CASH FLOWS | 1-9/09 6 | 1-9/08 6 | 1-12/08 12 | | (1000 EUR) | mon. | mon. | mon. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from operating activities | | | | -------------------------------------------------------------------------------- | Cash receipts from customers | 161,539 | 247,920 | 326,650 | -------------------------------------------------------------------------------- | Cash receipts from other operating | 1,397 | 886 | 1,304 | | activities | | | | -------------------------------------------------------------------------------- | Cash paid to suppliers and employees | -125,548 | -216,471 | -289,969 | -------------------------------------------------------------------------------- | Cash flows from operations before | 37,387 | 32,335 | 37,985 | | financial income and expenses and | | | | | taxes | | | | -------------------------------------------------------------------------------- | Interest paid | 344 | -3,266 | -5,644 | -------------------------------------------------------------------------------- | Interest received and other financial | 0 | 2,024 | 233 | | income | | | | -------------------------------------------------------------------------------- | Income taxes paid | -1,979 | -5,508 | -7,275 | -------------------------------------------------------------------------------- | Net cash from operating activities | 35,743 | 25,585 | 25,299 | | (A) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from investing activities | | | | -------------------------------------------------------------------------------- | Purchase of tangible and intangible | -3,862 | -5,419 | -9,906 | | assets | | | | -------------------------------------------------------------------------------- | Proceeds from sale of tangible and | 19 | 0 | 4 | | intangible assets | | | | -------------------------------------------------------------------------------- | Investments | -493 | -46 | -21,589 | -------------------------------------------------------------------------------- | Loans granted | -2 | -8 | -9 | -------------------------------------------------------------------------------- | Amortisations of loan received | 37 | 43 | 44 | -------------------------------------------------------------------------------- | Dividends received | 0 | 1 | 1 | -------------------------------------------------------------------------------- | Net cash flow from investing | -4,300 | -5,430 | -31,455 | | activities (B) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow after investments | 31,443 | 20,156 | -6,156 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from financing activities | | | | -------------------------------------------------------------------------------- | Drawing of credits | 0 | 3,658 | 37,313 | -------------------------------------------------------------------------------- | Amortisations of credits | -24,125 | -10,883 | -21,011 | -------------------------------------------------------------------------------- | Dividends paid | -2,694 | -8,104 | -8,104 | -------------------------------------------------------------------------------- | Net cash used in financing activities | -26,820 | -15,329 | 8,198 | | (C) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net increase (+) or decrease (-) in | 4,623 | 4,826 | 2,042 | | cash and equivalents | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FINANCIAL INDICATORS | 1-9/09 6 | 1-9/08 6 | 1-12/08 12 | | | mon. | mon. | mon. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, 1000 EUR | 146,424 | 247,033 | 311,713 | -------------------------------------------------------------------------------- | Operating profit/loss, 1000 EUR | -1,950 | 24,967 | 21,039 | -------------------------------------------------------------------------------- | % of net sales | -1.3 | 10.1 | 6.7 | -------------------------------------------------------------------------------- | Profit/loss before taxes, 1000 EUR | -721 | 22,660 | 15,228 | -------------------------------------------------------------------------------- | % of net sales | -0.5 | 9.2 | 4.9 | -------------------------------------------------------------------------------- | Net profit/loss for the period, 1000 | -896 | 14,993 | 5,519 | | EUR | | | | -------------------------------------------------------------------------------- | % of net sales | -0.6 | 6.1 | 1.8 | -------------------------------------------------------------------------------- | Return on equity (ROE), % | -1.5 | 23.1 | 6.9 | -------------------------------------------------------------------------------- | Return on investments (ROI), % | 4.8 | 18.7 | 14.5 | -------------------------------------------------------------------------------- | Net liabilities, 1000 EUR | 30,770 | 33,931 | 59,518 | -------------------------------------------------------------------------------- | Gearing, % | 41.3 | 37.6 | 75.7 | -------------------------------------------------------------------------------- | Equity ratio, % | 46.7 | 50.0 | 41.9 | -------------------------------------------------------------------------------- | Current ratio, % | 2.0 | 1.8 | 1.9 | -------------------------------------------------------------------------------- | Gross capital expenditure, 1000 EUR | 3,699 | 5,210 | 27,426 | -------------------------------------------------------------------------------- | % of net sales | 2.5 | 2.1 | 8.8 | -------------------------------------------------------------------------------- | R&D expenditures, 1000 EUR | 4,063 | 4,444 | 5,812 | -------------------------------------------------------------------------------- | % of net sales | 2.8 | 1.8 | 1.9 | -------------------------------------------------------------------------------- | Personnel average | 4,580 | 5,636 | 5,588 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PER-SHARE KEY FIGURES | 1-9/09 6 | 1-9/08 6 | 1-12/08 12 | | | mon. | mon. | mon. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR | -0.05 | 0.84 | 0.31 | -------------------------------------------------------------------------------- | Earnings per share (EPS),diluted, EUR | -0.05 | 0.86 | 0.31 | -------------------------------------------------------------------------------- | Equity per share, EUR | 4.20 | 5.06 | 4.40 | -------------------------------------------------------------------------------- | Share price at close of period, EUR | 5.11 | 6.60 | 3.25 | -------------------------------------------------------------------------------- | Lowest share price, EUR | 2.70 | 6.57 | 2.82 | -------------------------------------------------------------------------------- | Highest share price, EUR | 5.75 | 9.48 | 9.48 | -------------------------------------------------------------------------------- | Average share price, EUR | 3.89 | 7.59 | 6.56 | -------------------------------------------------------------------------------- | Turnover in shares, 1000 shares | 6,553 | 9,461 | 12,941 | -------------------------------------------------------------------------------- | Turnover in shares per (share issue | 36.9 | 53.2 | 72.8 | | adjusted) share capital, % | | | | -------------------------------------------------------------------------------- | Average number of shares, 1000 shares | 17,782 | 17,782 | 17,782 | -------------------------------------------------------------------------------- | Average number of shares, diluted,1000 | 16,541 | 17,535 | 17,782 | | shares | | | | -------------------------------------------------------------------------------- | Shares at end of period, 1000 shares | 17,782 | 17,782 | 17,782 | -------------------------------------------------------------------------------- | Market capitalisation , 1000 EUR | 90,864 | 117,358 | 57,790 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1. SEGMENT INFORMATION | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1.1.-30.9.2009 (1 000 | Wiring | Electronics | Eliminations | Group | | EUR) | Harness | | | Total | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sales to external | 108,984 | 37,440 | | 146,424 | | customers | | | | | -------------------------------------------------------------------------------- | Sales to other segment | 193 | 38 | -232 | 0 | -------------------------------------------------------------------------------- | Net sales, 1000 EUR | 109,177 | 37,478 | -232 | 146,424 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit/loss | -4,873 | 2,923 | 0 | -1,950 | -------------------------------------------------------------------------------- | % of net sales | -4.5 | 7.8 | | -1.3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Segments assets | 115,744 | 39,423 | | 155,167 | -------------------------------------------------------------------------------- | Unallocated assets *) | | | | 4,432 | -------------------------------------------------------------------------------- | Assets total | 115,744 | 39,423 | | 159,599 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | * Segments assets do not include deferred taxes | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1.1.-30.9.2008 (1 000 | Wiring | Electronics | Eliminations | Group | | EUR) | Harness | | | Total | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sales to external | 195,718 | 51,315 | | 247,033 | | customers | | | | | -------------------------------------------------------------------------------- | Sales to other segment | 151 | 585 | -736 | 0 | -------------------------------------------------------------------------------- | Net sales, 1000 EUR | 195,869 | 51,900 | -736 | 247,033 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit/loss | 15,961 | 9,007 | 0 | 24,968 | -------------------------------------------------------------------------------- | % of net sales | 8.2 | 17.6 | | 10.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Segments assets | 139,484 | 37,031 | | 176,515 | -------------------------------------------------------------------------------- | Unallocated assets *) | | | | 4,088 | -------------------------------------------------------------------------------- | Assets total | 139,484 | 37,031 | | 180,603 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | * Segments assets do not include deferred taxes | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1.1.-31.12.2008 (1 000 | Wiring | Electronics | Eliminations | Group | | EUR) | Harness | | | Total | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sales to external | 246,487 | 65,226 | | 311,713 | | customers | | | | | -------------------------------------------------------------------------------- | Sales to other segment | 193 | 671 | -864 | 0 | -------------------------------------------------------------------------------- | Net sales, 1000 EUR | 246,680 | 65,897 | -864 | 311,713 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit/loss | 9,744 | 11,295 | 0 | 21,039 | -------------------------------------------------------------------------------- | % of net sales | 4.0 | 17.3 | | 6.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Segments assets | 152,764 | 38,044 | -4,994 | 185,814 | -------------------------------------------------------------------------------- | Unallocated assets *) | | | | 1,623 | -------------------------------------------------------------------------------- | Assets total | 152,764 | 38,044 | -4,994 | 187,437 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | * Segments assets do not include deferred taxes | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES BY GEOGRAPHICAL | 7-9/09 | 7-9/08 | 1-9/09 | 1-9/08 | 1-12/08 | | SEGMENTS (1000 EUR) | 3 mon. | 3 mon. | 6 mon. | 6 mon. | 12 mon. | -------------------------------------------------------------------------------- | Finland | 9,624 | 15,004 | 29,986 | 45,517 | 58,621 | -------------------------------------------------------------------------------- | Other Europe | 22,218 | 31,990 | 74,391 | 121,985 | 151,701 | -------------------------------------------------------------------------------- | North America | 4,769 | 7,706 | 14,427 | 26,292 | 33,427 | -------------------------------------------------------------------------------- | South America | 6,303 | 14,196 | 16,048 | 38,009 | 48,510 | -------------------------------------------------------------------------------- | Other Countries | 3,927 | 4,477 | 11,572 | 15,229 | 19,453 | -------------------------------------------------------------------------------- | Total | 46,842 | 73,372 | 146,424 | 247,033 | 311,713 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 2. RECONCILIATION OF EQUITY | | | | | | | | (MILLION EUR) | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | A = Share Capital | | | | | | | -------------------------------------------------------------------------------- | B = Share premium account | | | | | | | -------------------------------------------------------------------------------- | C = Fair value and other | | | | | | | | reserves | | | | | | | -------------------------------------------------------------------------------- | D = Retained earnings | | | | | | | -------------------------------------------------------------------------------- | E = Minority interest | | | | | | | -------------------------------------------------------------------------------- | F = Total equity | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | A | B | C | D | E | F | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity | 6.0 | 4.9 | 0.2 | 71.1 | 0.3 | 82.5 | | 1.1.2008 | | | | | | | -------------------------------------------------------------------------------- | Profit/loss for the period | 0 | 0 | 0 | 15.0 | 0 | 15.0 | -------------------------------------------------------------------------------- | Dividends | 0 | 0 | 0 | -8.0 | 0 | -8.0 | -------------------------------------------------------------------------------- | Share options used | 0 | 0 | 0 | 0.4 | 0 | 0.4 | -------------------------------------------------------------------------------- | Translation differences | 0 | 0 | 0.1 | 0.5 | 0 | 0.6 | -------------------------------------------------------------------------------- | Other changes | 0 | 0 | 0.1 | -0.1 | 0 | 0 | -------------------------------------------------------------------------------- | Shareholders' equity | 6.0 | 4.9 | 0.4 | 78.9 | 0.3 | 90.4 | | 30.9.2008 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity | 6.0 | 4.9 | 0.4 | 67.1 | 0.3 | 78.6 | | 1.1.2009 | | | | | | | -------------------------------------------------------------------------------- | Profit/loss for the period | 0 | 0 | 0 | -0.9 | 0 | -0.9 | -------------------------------------------------------------------------------- | Dividends | 0 | 0 | 0 | -2.7 | 0 | -2.7 | -------------------------------------------------------------------------------- | Share-based payments | 0 | 0 | 0 | 0.2 | 0 | 0.2 | -------------------------------------------------------------------------------- | Translation differences | 0 | 0 | 0 | -0.7 | 0 | -0.7 | -------------------------------------------------------------------------------- | Acquisitions of minority | 0 | 0 | 0 | 0.3 | -0.3 | 0 | | interest | | | | | | | -------------------------------------------------------------------------------- | Shareholders' equity | 6.0 | 4.9 | 0.4 | 63.4 | 0.0 | 74.6 | | 30.9.2009 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 3. CONTINGENT LIABILITIES AT | 9/09 | 9/08 | 12/08 | | | END OF PERIOD (1000 EUR) | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Leasing liabilities | 5,435 | 6,345 | 11,745 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities for derivate | | | | | | instruments | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Nominal values | | | | | -------------------------------------------------------------------------------- | Currency derivates | | | | | -------------------------------------------------------------------------------- | Forward contracts | 640 | 7,123 | 3,307 | | -------------------------------------------------------------------------------- | Option agreements | | | | | -------------------------------------------------------------------------------- | Call | 1,073 | 1,649 | 757 | | -------------------------------------------------------------------------------- | Total | 1,713 | 8,772 | 4,064 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Fair values | | | | | -------------------------------------------------------------------------------- | Currency derivates | | | | | -------------------------------------------------------------------------------- | Forward contracts | -26 | 3 | -195 | | -------------------------------------------------------------------------------- | Option agreements | | | | | -------------------------------------------------------------------------------- | Call | 0 | -186 | 0 | | -------------------------------------------------------------------------------- | Total | -26 | -183 | -195 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Currency derivates are used only in hedging currency risks.PKC Group does | | not apply hedge accounting to derivate instruments in accordance with IAS | | 39. Fair values of the derivates are entered directly in the income | | statement. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 4. QUARTERLY KEY | 4-6/08 | 7-9/08 | 10-12/0 | 1-3/09 | 4-6/09 | 7-9/09 | | FIGURES, | 3 mon. | 3 mon. | 8 3 | 3 mon. | 3 mon. | 3 mon. | | CONSOLIDATED | | | mon. | | | | -------------------------------------------------------------------------------- | Net sales, 1000 | 88.57 | 73.37 | 64.68 | 53.75 | 45.83 | 46.84 | | EUR | | | | | | | -------------------------------------------------------------------------------- | Operating | 9.63 | 6.0 | -3.93 | 0.1 | -5.59 | 3.55 | | profit/loss, 1000 | | | | | | | | EUR | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 10.9 | 8.2 | -6.1 | 0.2 | -12.2 | 7.6 | -------------------------------------------------------------------------------- | Profit/loss before | 9.81 | 5.54 | -7.43 | -1.9 | -4.52 | 5.7 | | taxes, 1000 EUR | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 11.1 | 7.6 | -11.5 | -3.5 | -9.9 | 12.2 | -------------------------------------------------------------------------------- | Equity ratio, % | 48.6 | 50.0 | 41.9 | 42.9 | 42.5 | 46.7 | -------------------------------------------------------------------------------- | Earnings per share | 0.41 | 0.17 | -0.53 | -0.20 | -0.25 | 0.39 | | (EPS), diluted | | | | | | | | (EUR) | | | | | | | -------------------------------------------------------------------------------- | Shareholders | 4.82 | 5.06 | 4.40 | 4.05 | 3.83 | 4.20 | | equity per share, | | | | | | | | EUR | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | QUARTERLY KEY | | | | | | | | FIGURES, WIRING | | | | | | | | HARNESSESS | | | | | | | -------------------------------------------------------------------------------- | Net sales, 1000 | 69.29 | 56.95 | 50.77 | 41.7 | 33.1 | 34.18 | | EUR | | | | | | | -------------------------------------------------------------------------------- | Operating | 5.09 | 3.86 | -6.22 | -0.59 | -6.29 | 2.00 | | profit/loss, 1000 | | | | | | | | EUR | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 7.3 | 6.8 | -12.2 | -1.4 | -19.0 | 5.9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | QUARTERLY KEY | | | | | | | | FIGURES, | | | | | | | | ELECTRONICS | | | | | | | -------------------------------------------------------------------------------- | Net sales, 1000 | 19.28 | 16.42 | 13.91 | 12.05 | 12.73 | 12.66 | | EUR | | | | | | | -------------------------------------------------------------------------------- | Operating | 4.54 | 2.14 | 2.29 | 0.68 | 0.69 | 1.55 | | profit/loss, 1000 | | | | | | | | EUR | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 23.5 | 13.1 | 16.4 | 5.7 | 5.4 | 12.2 | -------------------------------------------------------------------------------- This unaudited interim report has been prepared in accordance with the accounting policies set out in International Accounting Standard 34 on Interim Financial Reporting and in the Group's Annual Report for 2008, except for the effects of the adoption of the standards described below: IFRS 8 Operating Segments The Group's reportable segments remain unchanged from those reported in previous interim reports. The adoption of this standard has had no impact on the reported results or financial position of the Group. IAS 1 Presentation of Financial Statements The revised standard has introduced a number of terminology changes and revised titles for the primary statements, however the adoption of this standard has had no impact on the reported results or financial position of the Group. CALCULATION OF INDICATORS Return on equity (ROE), % = 100 x Profit/loss / Shareholders' equity (average) Return on investments (ROI), % = 100 x (Profit/loss + financial expenses) / Balance sheet total + interest-bearing liabilities (average) Gearing, % = 100 x (Interest-bearing liabilities - cash in hand and at bank and investments) / Shareholders' equity + minority interest Equity ratio, % = 100 x (Shareholders' equity + minority interest) / Balance sheet total - advance payments received Quick ratio = Receivables and cash in hand and at bank / Current liabilities - advance payments received Current ratio Receivables and cash in hand and at bank + inventories / Current liabilities Earnings per share (EPS), EUR Profit before extraordinary items - income taxes +/- minority interest / Average share issue-adjusted number of shares Shareholders' equity per share, EUR Shareholders' equity / Share issue-adjusted number of shares on the balance sheet date Market capitalisation Number of shares at the end of the financial period x the last trading price of the financial period All the future estimates and forecasts presented in this stock exchange release are based on the best current knowledge of the company's management. The estimates and forecasts contain certain elements of risk and uncertainty which, if they materialise, may lead to results that differ from present estimates. The main factors of uncertainty are related, among other things, to the general economic situation, the trend in the operating environment and the sector as well as the success of the Group's strategy. PKC GROUP OYJ Board of Directors Harri Suutari President and CEO For additional information, contact: Harri Suutari, President & CEO, PKC Group Oyj, +358 400 384 937 PRESS CONFERENCE A press conference on the Interim Report will be arranged for analysts and investors today, 29 October 2009, at 10.00 a.m., at the address World Trade Center, Aleksanterinkatu 17, Helsinki. DISTRIBUTION NASDAQ OMX Main media www.pkcgroup.com The PKC Group offers design and contract manufacturing services for wiring harnesses, cabling and electronics. The Group has production facilities in Finland, Brazil, China, Mexico, Poland, Estonia and Russia. The Group's net sales in 2008 totalled EUR 311.7 million. PKC Group Oyj is listed on NASDAQ OMX Helsinki Ltd.
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