2008-07-15 11:50:00 CEST
2008-07-15 11:50:00 CEST
REGULATED INFORMATION
PKC Group Oyj - Interim report (Q1 and Q3)
CORRECTION TO PKC GROUP'S INTERIM REPORT JANUARY-JUNE/2008
PKC Group Oyj STOCK EXCHANGE RELEASE 15 JULY 2008 12.50 p.m. CORRECTION TO PKC GROUP'S INTERIM REPORT JANUARY-JUNE/2008 The PKC Interim Report published today at 8.15 a.m. contained an error in the item Loan Repayments in the cash flow statement. The correct amount should be EUR -8,642 thousand. Enclosed herein is the corrected stock exchange release in its entirety. THE PKC GROUP'S INTERIM REPORT JANUARY-JUNE/2008 The PKC Group's net sales in the first half of the year increased by 20.9% on the previous year to EUR 173.7 million (143.6 million in Jan.-June 2007). Operating profit was EUR 19.0 million (13.8 million) and profit before taxes was EUR 17.1 million (13.2 million). Earnings per share were EUR 0.67 (0.55). HARRI SUUTARI, PRESIDENT AND CEO: “The continued record growth in our customer sectors helped us achieve an excellent operational result in the first half of the year. We have fine-tuned our core strategic objectives for the near future. We are striving to further increase the number of customers in both our businesses by, among other things, venturing into new market areas and segments. We will continue our efforts to improve our competitiveness by rationalising production and shedding fixed expenses. Due to the rationalisation measures that were already started, the profit of the Wiring Harness business for the second quarter was decreased by about EUR 1.5 million additional costs. The increased uncertainty in the world economy is reflected in our future outlook. The downturn in the world economy is speeding up structural developments in our customer sectors, creating new opportunities for the long-term development of our business operations.” OPERATING ENVIRONMENT The commercial vehicle market grew vigorously compared to the same period a year ago. Deliveries by the Wiring Harnesses business to the commercial vehicle industry in Europe and South America were at a high level. The deliveries of wiring harnesses for other vehicles enjoyed a favourable trend. Sales of wiring harnesses and cabling to the telecommunications and electronics industry have grown considerably compared to the previous year. Electronics contract design and manufacturing continued to exhibit strong growth during the report period. Investments made by telecommunications customers led to an increase in the volume of design services, and demand from the industrial electronics sector also remained robust. Competition for new supply contracts and customer relationships remains intense, requiring the adoption of cost-efficient operating models and the ability to rapidly respond to customers' global needs. NET SALES AND FINANCIAL PERFORMANCE April-June 2008 Consolidated net sales in April-June amounted to EUR 88.6 million (73.7 million), up 20.2% on the same period a year earlier. Consolidated operating profit totalled EUR 9.6 million (7.3 million), accounting for 10.9% of net sales (10.0%). Depreciation amounted to EUR 2.1 million (1.6 million). Financial income and expenses were EUR 0.2 million (0.2 million negative). Profit before taxes was EUR 9.8 million (7.1 million). Profit for the report period rose to EUR 7.4 million (5.4 million). Earnings per share were EUR 0.41 (0.30). Net sales generated in the report period by the Wiring Harnesses business amounted to EUR 69.3 million (59.8 million), or 15.9% more than in the comparative period. The segment's share of consolidated net sales was 78.2% (81.1%). It generated an operating profit of EUR 5.1 million (5.6 million), equivalent to 7.3% of the segment's net sales (9.3%). The profit was affected by EUR 1.5 million additional costs related to reorganisation. Net sales generated by the Electronics business grew 38,6% to EUR 19.3 million (13.9 million). The segment's share of consolidated net sales was 21.8% (19.0%). It generated an operating profit of EUR 4.5 million (1.8 million), equivalent to 23.5% of the segment's net sales (12.5%). January-June 2008 Consolidated net sales in January-June amounted to EUR 173.7 million (143.6 million), up 20.9% on the same period a year earlier. Consolidated operating profit totalled EUR 19.0 million (13.8 million), accounting for 10.9% of net sales (9.6%). Depreciation amounted to EUR 4.0 million (3.7 million). Financial income and expenses were EUR 1.9 million negative (0.6 million negative). Profit before taxes was EUR 17.1 million (13.2 million). Profit for the report period totalled EUR 12.1 million (9.8 million). Earnings per share were EUR 0.67 (0.55). Net sales generated in the report period by the Wiring Harnesses business amounted to EUR 138.6 million (117.9 million), or 17.6% more than in the comparative period. The segment's share of consolidated net sales was 79.8% (82.1%). It generated an operating profit of EUR 12.1 million (10.5 million), equivalent to 8.7% of the segment's net sales (8.9%). Net sales generated by the Electronics business grew 36.1% to EUR 35.0 million (25.8 million). The segment's share of consolidated net sales was 20.2% (17.9%). It generated an operating profit of EUR 6.9 million (3.3 million), equivalent to 19.6% of the segment's net sales (12.8%). The Group's net sales grew in both business segments thanks to strong demand from customer sectors. Operational profitability was at a good level both in the Wiring Harnesses and the Electronics business. The programme for rationalising and improving the efficiency of operations was started during the second quarter. At the first stage, co-determination negotiations were held at the Group's Finnish wiring harnesses unit and the operations in North America were reorganised in a process that will be completed during the third quarter. The operations launched in China in 2005 and the businesses acquired in North America in 2006 continued to be loss-making. BALANCE SHEET AND FINANCING Consolidated total assets at 30 June 2008 stood at EUR 178.1 million (163.6 million). Interest-bearing liabilities totalled EUR 30.2 million at the close of the report period (56.5 million). The Group's equity ratio was 48.6% (45.9%). Net liabilities totalled EUR 47.6 million (48.6 million) and gearing was 42.0% (64.7%). Inventories amounted to EUR 45.3 million (37.5 million). Current receivables totalled EUR 73.2 million (74.2 million). Cash flows from investing activities during the report period were EUR 16.3 million (3.7 million negative). Cash in hand and at bank amounted to EUR 11.4 million (7.9 million). In order to ensure financing flexibility, PKC has available credit facilities. CAPITAL EXPENDITURES During the report period, the Group's gross capital expenditures totalled EUR 3.9 million (4.5 million), representing 2.2% of net sales (3.2%). Capital expenditures consisted mostly of the acquisition of production machinery and equipment. RESEARCH AND DEVELOPMENT Research and development expenditure totalled EUR 3.2 million (2.7 million), representing 1.9% (1.9%) of consolidated net sales. At the end of the report period, 104 (77) people were employed in product development. PERSONNEL During the report period, the Group had an average payroll of 5,638 employees (4,816). At the end of the report period, the Group's personnel numbered 5,722 employees (4,892), of whom 4,901 (4,155) worked abroad and 821 (737) in Finland. As a result of the co-determination negotiations which were completed in June, the contracts of 34 employees at the Kempele unit were laid off. Four of the employees, however, will take up a new position with another Group company. QUALITY AND THE ENVIRONMENT The Group's Wiring Harnesses business operations at the Haapsalu, Keila, Kempele, Kostomuksha and Suzhou production units have been certified in accordance with the ISO/TS 16949 and ISO 9001 standards as well as the ISO 14001 standard. The Curitiba production unit is certified under the ISO/TS 16949 and ISO 14001 standards. The Nogales production unit is certified in accordance with the ISO/TS 16949 and ISO 9001 standards, and after the report period it has also received ISO 14001 certificate. The Pskov production unit is certified in accordance with the ISO 14001 standard, while the certification processes of the ISO/TS 16949 and ISO 9001 standards are expected to be completed during the third quarter. The Group's Electronics business operations at the Kostomuksha and Raahe production units have been certified in accordance with the ISO 9001 and ISO 14001 standards. At the Electronics business's Suzhou production unit, the certification processes of the ISO 9001 and ISO 14001 standards are expected to be completed during the third quarter. The Group's Electronics business will begin preparations for certification in accordance with the ISO/TS 16949 standard. The Group's quality and environment-related activities are customer-oriented and strongly based on quality and environmental standards demanded by customers. The enhancement of quality and environmental matters is founded on the Group's joint objectives, which are dealt with and approved by the Group's Executive Board. The Wiring Harnesses business has identified the best quality practices that support day-to-day quality work. The segment strives to systematically utilise the best quality practices at all its production units. Quality improvement activities have already been started, and employees at each of the Wiring Harnesses business's production units have been provided with training to support these activities. ANNUAL GENERAL MEETING The Annual General Meeting on 27 March 2008 passed a resolution to pay a dividend of EUR 0.45 per share, or a total of about EUR 8.0 million. The dividend was paid out on 8 April 2008. The Annual General Meeting re-elected the following persons to seats on the Board of Directors: Matti Eestilä, Jaakko Niemelä, Endel Palla, Olli Pohjanvirta, Matti Ruotsala, Harri Suutari and Jyrki Tähtinen. At its organisation meeting, the Board of Directors elected Harri Suutari Chairman and Jyrki Tähtinen Vice Chairman. The firm of independent public accountants Ernst & Young Oy will continue as the company's auditor, with Rauno Sipilä, Authorised Public Accountant, acting as the principal auditor. MANAGEMENT CHANGES The Board of PKC Group Oyj decided to terminate the service contract of President and CEO Mika Kari and appointed Chairman of the Board Harri Suutari the new President and CEO as from 3 April 2008. The Board elected Matti Ruotsala as its new Chairman. Harri Suutari has resigned from the Board, and the Board will continue with six members. Mika Rytky, Vice President, Wiring Harnesses, has resigned from PKC Group Oyj's service as from 3 April 2008. Pekka Korkala and Jaan Murdla have been appointed Vice Presidents in charge of the Wiring Harnesses business, with their areas of responsibility being divided between production units. Jyri Kontio has been appointed Vice President in charge of the Wiring Harnesses business's sourcing, quality control and technology. Sanna Raatikainen, LL.M. (with court training), was appointed as the Group's General Counsel as from 16 June 2008. Raatikainen's area of responsibility also includes business development and risk management. Marja Sarajärvi, M.Sc. (Econ.), has been appointed CFO of the Group as from 16 July 2008, after Sami Klemola resigned his position upon his own request. The PKC Group's Executive Board is composed of President and CEO Harri Suutari (Chairman), Pekka Korkala, Jaan Murdla, Jyri Kontio, Jarmo Rajala, Sanna Raatikainen and Marja Sarajärvi. SHARE TURNOVER AND SHAREHOLDERS PKC Group Oyj's share turnover on OMX Nordic Exchange Helsinki from 1 January to 30 June 2008 was 7,550,701 shares (10,570,972 shares), representing 42.5% of the average number of shares (59.4%). Shares were traded to a total value of EUR 57.6 million (112.4 million). The low during the report period was EUR 6.88 (9.17) and the high was EUR 9.48 (12.40). The closing price on the last trading day of the report period was EUR 6.97 (10.59) and the average price during the period was EUR 7.60 (10.65). The company's market capitalisation at the close of the period was EUR 123.9 million (188.3 million). Shares held by Board members, their related persons and corporations in which they have a controlling interest accounted for 2.9% (2.9%) of the total number of shares at the end of the report period. PKC Group Oyj had a total of 7,407 shareholders (6,539) at the end of the report period. The proportion of shares held by foreigners and by way of nominee registrations at 30 June 2008 was 24.7% of the shares outstanding (27.8%). SHARE CAPITAL The Board of Directors has been 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 for on the basis of the authorisation. The authorisation includes the right to decide on a directed share issue. The authorisation 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 have a valid authorisation to acquire the company's own shares, and 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, and 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 168,690 2006A warrants, 201,850 2006B warrants and 235,660 2006C warrants in their possession. The subscription period for shares through the exercise of stock options shall be during the years 2009-2013. The share subscription price for stock options shall be the volume-weighted average price of the PKC Group Oyj share on OMX Nordic Exchange Helsinki, with dividend adjustments, as defined in the stock option terms (at present, EUR 10.64 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 stock options 2006 are subject to a share ownership plan. Key personnel are obligated to subscribe for 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. SHORT-TERM RISKS AND UNCERTAINTIES The PKC Group strives to manage and limit any adverse effects of risks encountered in its operations. The main risks are the market trend in the demand for the products of its main customers, price pressures and demands for tighter contractual terms imposed by customers, the availability of raw materials and components and changes in their world market prices, as well as the adequacy of production capacity in case demand rises rapidly. The principles, objectives and organisation of the company's risk management as well as key risk areas are described in the risk management section in the Corporate Governance guidelines, which are available on the company's website, www.pkcgroup.com. OUTLOOK FOR THE FUTURE The higher degree of uncertainty in the global economy has not been reflected in customers' orders or forecasts. The sharp rise in fuel prices and the higher cost of financing, however, are creating uncertainty in customer sectors' future demand. In accordance with customer forecasts, we expect deliveries to the commercial vehicle industry to grow compared with the previous year. Because of the continuing consolidation trend among customers, competitors and suppliers and with overall demand potentially levelling off, the competitive situation is expected to continue to become tighter. The volume of wiring harnesses deliveries to the rest of the vehicle industry and to customers in the telecommunications and automation industries is expected to increase with the introduction of new product ranges. Competition on the contract design and manufacturing market will remain stiff, calling for cost-efficiency and the capability to rapidly respond to customers' worldwide needs. By offering customers services that cover all stages of a product's life cycle, we will guarantee the continuation of close co-operation based on trust in the future. Consolidated net sales during the current year are expected to grow on the previous year. Despite the downward trend in selling prices, strongly fluctuating prices of raw materials and reorganisation expenses, we are expecting operational profitability to remain at good level. TABLES -------------------------------------------------------------------------------- | CONSOLIDATED INCOME | 4-6/08 | 4-6/07 | 1-6/08 | 1-6/07 | 1-12/07 | | STATEMENT (1000 EUR) | 3 mon. | 3 mon. | 6 mon. | 6 mon. | 12 mon. | -------------------------------------------------------------------------------- | NET SALES | 88,569 | 73,670 | 173,661 | 143,637 | 288,649 | -------------------------------------------------------------------------------- | Increase (+) / | -223 | 743 | -2,687 | 1,055 | 4,668 | | decrease (-) in | | | | | | | stocks of finished | | | | | | | goods and work in | | | | | | | progress | | | | | | -------------------------------------------------------------------------------- | Other operating | 243 | 188 | 609 | 486 | 1,009 | | income | | | | | | -------------------------------------------------------------------------------- | Raw materials and | 47,245 | 41,466 | 92,117 | 80,868 | 162,665 | | services | | | | | | -------------------------------------------------------------------------------- | Staff expenses | 21,142 | 16,694 | 40,386 | 32,435 | 66,824 | -------------------------------------------------------------------------------- | Depreciation | 2,067 | 1,625 | 4,018 | 3,709 | 7,644 | -------------------------------------------------------------------------------- | Other operating | 8,510 | 7,479 | 16,094 | 14,354 | 29,022 | | expenses | | | | | | -------------------------------------------------------------------------------- | OPERATING PROFIT | 9,626 | 7,339 | 18,968 | 13,812 | 28,171 | -------------------------------------------------------------------------------- | Interest and | -829 | -627 | -1,498 | -1,104 | -2,310 | | financial income and | | | | | | | expenses | | | | | | -------------------------------------------------------------------------------- | Other financial | 1,011 | 433 | -352 | 529 | -219 | | income and expenses | | | | | | -------------------------------------------------------------------------------- | PROFIT BEFORE TAXES | 9,808 | 7,145 | 17,117 | 13,238 | 25,642 | -------------------------------------------------------------------------------- | Income taxes | -2,380 | -1,703 | -5,064 | -3,422 | -8,063 | -------------------------------------------------------------------------------- | PROFIT FOR THE | 7,427 | 5,442 | 12,053 | 9,816 | 17,579 | | REPORT PERIOD | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | | -------------------------------------------------------------------------------- | Shareholders of the | 7,338 | 5,384 | 11,939 | 9,705 | 17,374 | | parent company | | | | | | -------------------------------------------------------------------------------- | Minority intrest | -89 | -59 | -113 | -112 | -205 | -------------------------------------------------------------------------------- | Total | 7,427 | 5,443 | 12,053 | 9,817 | 17,579 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | From profit | | | | | | | attributable to | | | | | | | shareholders of the | | | | | | | parent company | | | | | | -------------------------------------------------------------------------------- | Basic earnings per | 0.41 | 0.30 | 0.67 | 0.55 | 0.98 | | share (EPS), EUR | | | | | | -------------------------------------------------------------------------------- | Diluted earnings per | 0.42 | 0.30 | 0.68 | 0.55 | 0.98 | | share (EPS), EUR | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET | 6/08 | 6/07 | 12/07 | | (1000 EUR) | | | | -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | NON-CURRENT ASSETS | | | | -------------------------------------------------------------------------------- | Goodwill | 5,870 | 6,350 | 6,214 | -------------------------------------------------------------------------------- | Other intangible assets | 3,372 | 3,370 | 3,534 | -------------------------------------------------------------------------------- | Tangible assets | 34,550 | 31,639 | 34,454 | -------------------------------------------------------------------------------- | Deferred tax assets | 3,795 | 2,328 | 3,804 | -------------------------------------------------------------------------------- | Other receivables | 460 | 289 | 388 | -------------------------------------------------------------------------------- | Non-current assets total | 48,048 | 43,978 | 48,393 | -------------------------------------------------------------------------------- | CURRENT ASSETS | | | | -------------------------------------------------------------------------------- | Inventories | 45,349 | 37,523 | 46,954 | -------------------------------------------------------------------------------- | Receivables | | | | -------------------------------------------------------------------------------- | Trade receivables | 65,462 | 68,204 | 61,176 | -------------------------------------------------------------------------------- | Other receivables | 7,784 | 6,011 | 9,001 | -------------------------------------------------------------------------------- | Receivables total | 73,247 | 74,215 | 70,176 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 11,466 | 7,903 | 10,426 | -------------------------------------------------------------------------------- | Current assets total | 130,061 | 119,641 | 127,556 | -------------------------------------------------------------------------------- | ASSETS TOTAL | 178,109 | 163,618 | 175,949 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- | EQUITY | | | | -------------------------------------------------------------------------------- | Share capital | 5,983 | 5,983 | 5,983 | -------------------------------------------------------------------------------- | Share premium account | 4,862 | 4,862 | 4,862 | -------------------------------------------------------------------------------- | Reserve fund | 370 | 258 | 239 | -------------------------------------------------------------------------------- | Translation difference | -697 | 112 | 5 | -------------------------------------------------------------------------------- | Share-based payments | 987 | 379 | 759 | -------------------------------------------------------------------------------- | Retained earnings | 62,258 | 53,089 | 52,970 | -------------------------------------------------------------------------------- | Profit for the report period | 11,939 | 9,705 | 17,374 | -------------------------------------------------------------------------------- | Minority interest | 876 | 713 | 789 | -------------------------------------------------------------------------------- | EQUITY TOTAL | 86,578 | 75,101 | 82,980 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES | | | | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 17,578 | 31,834 | 21,078 | -------------------------------------------------------------------------------- | Non-interest-bearing | | | | | liabilities | | | | -------------------------------------------------------------------------------- | Provisions | 135 | 223 | 114 | -------------------------------------------------------------------------------- | Deferred tax liabilities | 654 | 228 | 560 | -------------------------------------------------------------------------------- | Non-current liabilities total | 18,367 | 32,285 | 21,752 | -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 30,210 | 24,671 | 34,606 | -------------------------------------------------------------------------------- | Trade payables | 24,486 | 18,905 | 21,173 | -------------------------------------------------------------------------------- | Other liabilities | 18,468 | 12,656 | 15,438 | -------------------------------------------------------------------------------- | Current liabilities total | 73,164 | 56,232 | 71,217 | -------------------------------------------------------------------------------- | Liabilities total | 91,396 | 88,294 | 92,855 | -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES TOTAL | 178,109 | 163,618 | 175,949 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED CASH FLOW | 1-6/08 6 | 1-6/07 6 | 1-12/07 12 | | STATEMENT (1000 EUR) | mon. | mon. | mon. | -------------------------------------------------------------------------------- | Cash flows from operating | | | | | activities | | | | -------------------------------------------------------------------------------- | Cash receipts from customers | 169,697 | 131,065 | 282,362 | -------------------------------------------------------------------------------- | Cash receipts from other | 602 | 430 | 974 | | operating activities | | | | -------------------------------------------------------------------------------- | Cash paid to suppliers and | -144,878 | -125,486 | -258,253 | | employees | | | | -------------------------------------------------------------------------------- | Cash flows from operations, | 25,421 | 6,010 | 25,082 | | before financial income and | | | | | expenses and taxes | | | | -------------------------------------------------------------------------------- | Interests paid | -3,301 | -342 | -2,745 | -------------------------------------------------------------------------------- | Interests received and other | 1,658 | 400 | 817 | | financial income | | | | -------------------------------------------------------------------------------- | Income taxes paid | -3,132 | -4,489 | -10,497 | -------------------------------------------------------------------------------- | Net cash from operating | 20,645 | 1,579 | 12,658 | | activities (A) | | | | -------------------------------------------------------------------------------- | Cash flows from investing | | | | | activities | | | | -------------------------------------------------------------------------------- | Purchase of tangible and | -4,397 | -3,749 | -11,143 | | intangible assets | | | | -------------------------------------------------------------------------------- | Proceeds from sale of | 0 | -182 | 108 | | tangible and intangible | | | | | assets | | | | -------------------------------------------------------------------------------- | Investments | 0 | -1,298 | -1,380 | -------------------------------------------------------------------------------- | Loans granted | -7 | -5 | -11 | -------------------------------------------------------------------------------- | Amortisation of loan | 40 | 4 | 9 | | receivables | | | | -------------------------------------------------------------------------------- | Dividens received | 0 | 1 | 1 | -------------------------------------------------------------------------------- | Net cash flow from investing | -4,365 | -5,229 | -12,416 | | activities (B) | | | | -------------------------------------------------------------------------------- | Cash flows from financing | | | | | activities | | | | -------------------------------------------------------------------------------- | Drawing of credits | 1,429 | 15,000 | 18,843 | -------------------------------------------------------------------------------- | Amortisation of credits | -8,642 | -3,461 | -8,642 | -------------------------------------------------------------------------------- | Dividends paid | -8,028 | -8,046 | -8,077 | -------------------------------------------------------------------------------- | Net cash used in financing | -15,241 | 3,493 | 2,123 | | activities (C) | | | | -------------------------------------------------------------------------------- | Net increase (+) or decrease | 1,040 | -157 | 2,365 | | (-) in cash and equivalents | | | | | (A+B+C) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | GROUP KEY FINANCIAL | 1-6/08 6 | 1-6/07 6 | 1-12/07 12 | | INDICATORS | mon. | mon. | mon. | -------------------------------------------------------------------------------- | Net sales, 1000 EUR | 173,661 | 143,637 | 288,649 | -------------------------------------------------------------------------------- | Operating profit, 1000 EUR | 18,968 | 13,812 | 28,171 | -------------------------------------------------------------------------------- | % of net sales | 10.9 | 9.6 | 9.8 | -------------------------------------------------------------------------------- | Profit before taxes, 1000 EUR | 17,117 | 13,238 | 25,642 | -------------------------------------------------------------------------------- | % of net sales | 9.9 | 9.2 | 8.9 | -------------------------------------------------------------------------------- | Net profit for the period, | 11,939 | 9,705 | 17,374 | | 1000 EUR | | | | -------------------------------------------------------------------------------- | % of net sales | 6.9 | 6.8 | 6.0 | -------------------------------------------------------------------------------- | Return on equity(ROE), % | 28.4 | 26.6 | 22.6 | -------------------------------------------------------------------------------- | Return on investments (ROI), | 31.1 | 23.7 | 23.4 | | % | | | | -------------------------------------------------------------------------------- | Net liabilities, 1000 EUR | 36,322 | 48,602 | 45,258 | -------------------------------------------------------------------------------- | Gearing, % | 42.0 | 64.7 | 54.5 | -------------------------------------------------------------------------------- | Equity ratio, % | 48.6 | 45.9 | 47.2 | -------------------------------------------------------------------------------- | Current ratio | 1.8 | 2.1 | 1.8 | -------------------------------------------------------------------------------- | Gross capital expenditure, | 3,890 | 4,529 | 10,791 | | 1000 EUR | | | | -------------------------------------------------------------------------------- | % of net sales | 2.2 | 3.2 | 3.7 | -------------------------------------------------------------------------------- | R&D expenditures, 1000 EUR | 3,240 | 2,681 | 5,511 | -------------------------------------------------------------------------------- | % of net sales | 1.9 | 1.9 | 1.9 | -------------------------------------------------------------------------------- | Personnel average | 5,638 | 4,816 | 4,971 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | GROUP PER-SHARE KEY FIGURES | 1-6/08 6 | 1-6/07 6 | 1-12/07 12 | | | mon. | mon. | mon. | -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR | 0.67 | 0.55 | 0.98 | -------------------------------------------------------------------------------- | Earnings per share | 0.68 | 0.55 | 0.98 | | (EPS),diluted, EUR | | | | -------------------------------------------------------------------------------- | Equity per share, EUR | 4.82 | 4.18 | 4.62 | -------------------------------------------------------------------------------- | Share price at end of period, | 6.97 | 10.59 | 8.70 | | EUR | | | | -------------------------------------------------------------------------------- | Lowest share price, EUR | 6.88 | 9.17 | 8.55 | -------------------------------------------------------------------------------- | Highest share price, EUR | 9.48 | 12.40 | 12.40 | -------------------------------------------------------------------------------- | Average share price, EUR | 7.60 | 10.65 | 10.48 | -------------------------------------------------------------------------------- | Turnover in shares, 1000 | 7,551 | 10,571 | 17,640 | | shares | | | | -------------------------------------------------------------------------------- | Turnover in shares per share | 42.5 | 59.4 | 99.2 | | issue adjusted share capital, | | | | | % | | | | -------------------------------------------------------------------------------- | Average number of shares, | 17,782 | 17,782 | 17,782 | | 1000 shares | | | | -------------------------------------------------------------------------------- | Average number of shares, | 17,698 | 17,768 | 17,782 | | diluted,1000 shares | | | | -------------------------------------------------------------------------------- | Shares at end of period, 1000 | 17,782 | 17,782 | 17,782 | | shares | | | | -------------------------------------------------------------------------------- | Market capitalisation, 1000 | 123,937 | 188,306 | 154,699 | | EUR | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1. SEGMENT | | | | | | | INFORMATION | | | | | | -------------------------------------------------------------------------------- | NET SALES BY | 4-6/08 | 4-6/07 | 1-6/08 | 1-6/07 | 1-12/07 | | BUSINESS SEGMENTS | 3 mon. | 3 mon. | 6 mon. | 6 mon. | 12 mon. | -------------------------------------------------------------------------------- | Wiring Harnesses, | 69,357 | 59,810 | 138,748 | 117,943 | 230,183 | | 1000 EUR | | | | | | -------------------------------------------------------------------------------- | Net sales to other | -65 | -44 | -131 | -56 | -170 | | segments, 1000 EUR | | | | | | -------------------------------------------------------------------------------- | Wiring Harnesses | 69,292 | 59,765 | 138,616 | 117,886 | 230,013 | | total, 1000 EUR | | | | | | -------------------------------------------------------------------------------- | Wiring Harnesses, % | 78.2 | 81.1 | 79.8 | 82.1 | 79.7 | | of net sales | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Electronics, 1000 | 19,516 | 14,119 | 35,512 | 26,138 | 59,471 | | EUR | | | | | | -------------------------------------------------------------------------------- | Net sales to other | -239 | -214 | -467 | -387 | -835 | | segments, 1000 EUR | | | | | | -------------------------------------------------------------------------------- | Electronics total, | 19,277 | 13,905 | 35,045 | 25,751 | 58,636 | | 1000 EUR | | | | | | -------------------------------------------------------------------------------- | Electronics, % of | 21.8 | 18.9 | 20.2 | 17.9 | 20.3 | | net sales | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group Total | 88,569 | 73,670 | 173,661 | 143,637 | 288,649 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT BY | | | | | | | BUSINESS SEGMENTS | | | | | | -------------------------------------------------------------------------------- | Wiring Harnesses, | 5,087 | 5,570 | 12,104 | 10,510 | 18,746 | | 1000 EUR | | | | | | -------------------------------------------------------------------------------- | Wiring Harnesses, % | 7.3 | 9.3 | 8.7 | 8.9 | 8.2 | | of net sales | | | | | | -------------------------------------------------------------------------------- | Electronics, 1000 | 4,539 | 1,769 | 6,863 | 3,302 | 9,424 | | EUR | | | | | | -------------------------------------------------------------------------------- | Electronics, % of | 23.5 | 12.7 | 19.6 | 12.8 | 16.1 | | net sales | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group Total | 9,626 | 7,339 | 18,968 | 13,812 | 28,171 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES BY | | | | | | | GEOGRAPHICAL | | | | | | | SEGMENTS (1000 | | | | | | | EUR) | | | | | | -------------------------------------------------------------------------------- | Finland | 14,908 | 13,885 | 30,513 | 26,372 | 54,411 | -------------------------------------------------------------------------------- | Other Europe | 44,955 | 39,679 | 89,995 | 79,484 | 153,727 | -------------------------------------------------------------------------------- | North America | 9,248 | 8,257 | 18,587 | 16,404 | 30,692 | -------------------------------------------------------------------------------- | South America | 13,102 | 9,508 | 23,814 | 17,312 | 36,145 | -------------------------------------------------------------------------------- | Other Countries | 6,356 | 2,341 | 10,752 | 4,065 | 13,673 | -------------------------------------------------------------------------------- | Total | 88,569 | 73,670 | 173,661 | 143,637 | 288,649 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 2. RECONCILIATION OF EQUITY (MILLION EUR) | -------------------------------------------------------------------------------- | A = Share Capital | -------------------------------------------------------------------------------- | B = Share premium account | -------------------------------------------------------------------------------- | C = Changes in fair values and other reserves | -------------------------------------------------------------------------------- | D = Retained earnings | -------------------------------------------------------------------------------- | E = Minority interest | -------------------------------------------------------------------------------- | F = Total equity | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | A | B | C | D | E | F | -------------------------------------------------------------------------------- | Shareholders' | 6.0 | 4.9 | 0.2 | 60.9 | 0.6 | 72.5 | | equity 1.1.2007 | | | | | | | -------------------------------------------------------------------------------- | Profit for the | 0 | 0 | 0 | 9.7 | 0.1 | 9.8 | | period | | | | | | | -------------------------------------------------------------------------------- | Dividends | 0 | 0 | 0 | -8.0 | 0 | -8.0 | -------------------------------------------------------------------------------- | Share-based | 0 | 0 | 0 | 0.2 | 0 | 0.2 | | payments | | | | | | | -------------------------------------------------------------------------------- | Translation | 0 | 0 | 0 | 0.5 | 0 | 0.5 | | differences | | | | | | | -------------------------------------------------------------------------------- | Other changes | 0 | 0 | 0.1 | -0.1 | 0 | 0 | -------------------------------------------------------------------------------- | Shareholders' | 6.0 | 4.9 | 0.3 | 63.2 | 0.7 | 75.1 | | equity 30.6.2007 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' | 6.0 | 4.9 | 0.2 | 71.1 | 0.8 | 83.0 | | equity 1.1.2008 | | | | | | | -------------------------------------------------------------------------------- | Profit for the | 0 | 0 | 0 | 11.8 | 0.1 | 11.9 | | period | | | | | | | -------------------------------------------------------------------------------- | Dividends | 0 | 0 | 0 | -8.0 | 0 | -8.0 | -------------------------------------------------------------------------------- | Share-based | 0 | 0 | 0 | 0.2 | 0 | 0.2 | | payments | | | | | | | -------------------------------------------------------------------------------- | Translation | 0 | 0 | 0 | -0.7 | 0 | -0.7 | | differences | | | | | | | -------------------------------------------------------------------------------- | Other changes | 0 | 0 | 0.1 | 0.2 | 0 | 0.2 | -------------------------------------------------------------------------------- | Shareholders' | 6.0 | 4.9 | 0.3 | 74.6 | 0.8 | 86.6 | | equity 30.6.2008 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 3. GROUP CONTINGENT | 6/08 | 6/07 | 12/07 | | LIABILITIES AT END OF PERIOD | | | | | (1000 EUR) | | | | -------------------------------------------------------------------------------- | Leasing liabilities | 5,752 | 6,901 | 5,668 | -------------------------------------------------------------------------------- | Liabilities for derivate | | | | | instruments | | | | -------------------------------------------------------------------------------- | Nominal values | | | | -------------------------------------------------------------------------------- | Currency derivates | | | | -------------------------------------------------------------------------------- | Forward contracts | 3,719 | 6,248 | 5,740 | -------------------------------------------------------------------------------- | Option agreements | | | | -------------------------------------------------------------------------------- | Call | 1,756 | 0 | 1,598 | -------------------------------------------------------------------------------- | Total | 5,475 | 6,248 | 7,338 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Fair values | | | | -------------------------------------------------------------------------------- | Currency derivates | | | | -------------------------------------------------------------------------------- | Forward contracts | -124 | -74 | -105 | -------------------------------------------------------------------------------- | Option agreements | | | | -------------------------------------------------------------------------------- | Call | -74 | 0 | -144 | -------------------------------------------------------------------------------- | Total | -198 | -74 | -249 |-------------------------------------------------------------------------------- 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 | 1-3/07 | 4-6/07 | 6-9/07 | 9-12/07 | 1-3/08 | 4-6/08 | | FIGURES, | 3 mon. | 3 mon. | 3 mon. | 3 mon. | 3 mon. | 3 mon. | | CONSOLIDATED | | | | | | | -------------------------------------------------------------------------------- | Net sales, EUR | 69.97 | 73.67 | 66.93 | 78.08 | 85.09 | 88.57 | | MILLION | | | | | | | -------------------------------------------------------------------------------- | Operating profit, | 6.47 | 7.34 | 7.56 | 6.80 | 9.34 | 9.63 | | EUR MILLION | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 9.3 | 10.0 | 11.3 | 8.7 | 11.0 | 10.9 | -------------------------------------------------------------------------------- | Profit before | 6.09 | 7.14 | 6.77 | 5.63 | 7.31 | 9.81 | | taxes, EUR | | | | | | | | MILLION | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 8.7 | 9.7 | 10.1 | 7.2 | 8.6 | 11.1 | -------------------------------------------------------------------------------- | Equity ratio, % | 44.2 | 45.9 | 47.0 | 47.2 | 46.0 | 48.6 | -------------------------------------------------------------------------------- | Earnings per share | 0.24 | 0.30 | 0.25 | 0.19 | 0.26 | 0.41 | | (EPS), (EUR) | | | | | | | -------------------------------------------------------------------------------- | Shareholders | 3.84 | 4.18 | 4.43 | 4.62 | 4.39 | 4.82 | | equity per share, | | | | | | | | EUR | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | QUARTERLY KEY | | | | | | | | FIGURES, WIRING | | | | | | | | HARNESSES | | | | | | | -------------------------------------------------------------------------------- | Net sales, EUR | 58.12 | 59.77 | 50.16 | 61.97 | 69.32 | 69.29 | | MILLION | | | | | | | -------------------------------------------------------------------------------- | Operating profit, | 4.94 | 5.57 | 3.31 | 4.61 | 7.02 | 5.09 | | EUR MILLION | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 8.5 | 9.3 | 6.6 | 7.4 | 10.1 | 7.3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | QUARTERLY KEY | | | | | | | | FIGURES, | | | | | | | | ELECTRONICS | | | | | | | -------------------------------------------------------------------------------- | Net sales, EUR | 11.85 | 13.91 | 16.77 | 16.12 | 15.77 | 19.28 | | MILLION | | | | | | | -------------------------------------------------------------------------------- | Operating profit, | 1.53 | 1.77 | 4.25 | 2.19 | 2.32 | 4.54 | | EUR MILLION | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 12.9 | 12.7 | 25.3 | 13.6 | 14.7 | 23.5 | -------------------------------------------------------------------------------- CALCULATION OF INDICATORS Return on equity (ROE), % = 100 x (Profit before extraordinary items - taxes) / Shareholders' equity + minority interest (average) Return on investments (ROI), % = 100 x (Profit before extraordinary items - interest and other financial expenses) / Balance sheet total - non-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 The figures presented have not been audited. This Quarterly Report has been prepared in accordance with International Financial Reporting Standards (IFRS). 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 20 1752 350 DISTRIBUTION OMX Nordic Exchange Helsinki 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, Estonia and Russia, and employs over 5,700 people. The Group's net sales in 2007 totalled EUR 288.6 million. PKC Group Oyj is listed on OMX Nordic Exchange Helsinki.
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