2012-05-04 07:15:00 CEST
2012-05-04 07:15:11 CEST
REGULATED INFORMATION
PKC Group Oyj - Interim report (Q1 and Q3)
PKC GROUP’S INTERIM REPORT 1-3/2012
PKC Group Plc INTERIM REPORT 4 May 2012 8.15 a.m.
PKC GROUP'S INTERIM REPORT 1-3/2012
-- Net sales grew 149.7% on the comparison period (1-3/2011), totalling EUR
242.0 million (EUR 96.9 million).
-- Operating profit before PPA depreciation amortization and non-recurring
items was EUR 16.1 million (EUR 10.2 million). During the report period PPA
depreciation and amortization totalled EUR 3.2 million (EUR 0.6 million).
-- Operating profit was EUR 12.7 million (EUR 9.7 million) i.e. 5.3% (10.0%)
of net sales.
-- Net profit for the report period amounted to EUR 6.9 million (EUR 7.6
million).
-- Diluted earnings per share were EUR 0.33 (EUR 0.38).
-- Gross capital expenditure was EUR 4.8 million (EUR 2.5 million)
-- Net cash from operating activities was EUR 25.9 million (EUR 2.4 million)
-- Cash flows after investments were EUR 23.1 million (EUR 0.1 million).
-- Gearing was 52.1% (3.8% negative).
-- Equity ratio was 30.9% (52.4%)
-- Net liabilities were EUR 85.1 million (EUR 4.6 million negative).
KEY FIGURES 1-3/12 1-3/11 1-12/11
Net sales, EUR 1,000 241,967 96,886 550,208
Operating profit, EUR 1,000 12,735 9,670 34,505
% of net sales 5.3 10.0 6.3
Net profit for the report period, EUR 1,000 6,895 7,592 23,445
Earnings per share (EPS), EUR 0.33 0.38 1.16
ROI,% 21.2 28.3 18.9
Net liabilities, EUR 1,000 85,098 -4,624 110,739
Gearing, % 52.1 -3.8 72.6
Average number of personnel 21,955 6,234 10,793
MATTI HYYTIÄINEN, PRESIDENT AND CEO:
“We can be satisfied with our performance in the first quarter. The Group's net
sales and operating profit increased over the comparison period. I am
particularly pleased that actions to improve cash flow and reduce net working
capital yielded results. Our net working capital was reduced by EUR 12.6
million during the first quarter and cash flow after investments improved
significantly and was EUR 23.1 million.
PKC's earnings per share was lower than in comparison period because the amount
of income taxes increased in report period.
Production volumes for commercial vehicles and light vehicles continued to grow
in North America. Production volumes for heavy-duty commercial vehicles
increased by about 50% over the comparison period, and volumes for medium-duty
vehicles increased more than 10% and volumes for light vehicles less than 10%.
We were able to meet the increased demand without significant investments in
production.
In Europe, production volumes for heavy- and medium-duty commercial vehicles
fell by about 8% over the comparison period. We methodically adapted our
European production level to correspond to the production volumes of our
customers.
In Brazil, production volumes for heavy-duty commercial vehicles fell by 15%
over the comparison period but fell close to 40% compared to last quarter of
2011. The main reasons for the reduced production volumes were the
first-quarter transition to new emissions regulations (Euro 5) and the annual
holidays that occurred over the same period of time. In Brazil, PKC also
manufactures wiring harnesses for passenger cars, and their production volumes
decreased significantly in the period under review. PKC is currently
reorganising production and other operations in Brazil. As a result of low
production volumes and on-going reorganisation, the operating profit of our
Brazilian unit was negative. Measures to improve the situation have been
started. The aim is to conclude the reorganisation, the related production
transfers and improvement measures during 2012.
PKC's Wiring Systems business developed favourably. Wiring Systems business'
EBIT was EUR 15.0 million. ODM deliveries by PKC's Electronics business were at
a very low level, and as a result operating profit for the first quarter was
EUR 1.0 million negative.
The full-year prospects for demand for PKC's customers vary by market. In North
America, full-year production volumes for heavy-duty commercial vehicles are
forecast to be 15-20% higher than in 2011, and correspondingly volumes for
medium-duty and light vehicles 2-4% higher.
As far as Europe is concerned, production volumes for heavy- and medium-duty
commercial vehicles are forecast to be 5−10% less than those for 2011.
In Brazil, production volumes in 2012 are expected to fall between 25-30%
compared to year 2011.”
OPERATING ENVIRONMENT
Wiring Systems business
- Vehicles, Europe
Economic uncertainty continued in Europe and this had a negative impact to the
market confidence. The truck buyers have placed fewer orders and truck
manufacturers have responded to weakening demand by reducing their output
rates. Among the truck market segments the heavy duty haulage has remained the
key driver of sales.
First quarter 2012 production of heavy duty trucks reached 73,000 units which
was 8% less than in the same period of time year earlier and 20% less than in
the fourth quarter 2011.
First quarter 2012 production of medium duty trucks was 17,000 units which was
8% less than in the same period of time year earlier but remained almost in the
same level as in the fourth quarter 2011.
The worries over the economic outlook in Europe will remain and the truck
production for full year 2012 is expected to be lower than full year 2011. Full
year 2012 heavy duty truck production is expected to be 300,000 units which is
6% less than last year. The comparable numbers for medium duty truck production
are estimated to be 68,000 units and 9% less than year 2011.
- Vehicles, North America
The demand for new trucks remained robust as fleets continued to replace aging
equipment. NAFTA first quarter 2012 production of class 8 reached 76,000 units
which is close to 50% growth compared to same period year earlier and a small
growth of 2% compared to the fourth quarter 2011. The order backlogs for heavy
duty commercial trucks represented 3.5 month's supply of production at the
factories, a sharp change from the 8 months one year ago.
NAFTA first quarter 2012 medium duty truck production rose to 45,000 units
which represented 10% growth compared to same period year earlier and 10%
growth compared to last quarter of 2011.
Light vehicle production volumes reflected positive sentiment in the market and
first quarter production increased by 6% compared to the first quarter 2011 and
grew close to 9% compared to fourth quarter 2011.
The supply of drivers being moderately tight, freight demand good and freight
companies' profits healthy, new capacity is likely to be added to fleets
moderately and the replacement of aging trucks will continue. The full year
production for heavy duty (class 8) trucks is estimated to be just below
300,000 units. This is close to 20% growth compared to the full year 2011.
Medium duty truck production is estimated to be close to 175,000 units which
represents modest growth of 4% compared to year 2011. Light vehicle production
is estimated to grow by 2% and to reach 6.7 million vehicles in 2012.
- Vehicles, South America
The demand of the commercial vehicles was adversely affected during the quarter
by the transition to Euro 5 vehicles in Brazil. The first quarter heavy duty
truck production reached 26,000 units and this was close to 15% less than first
quarter of 2011 and 38% less than fourth quarter 2011. The medium duty truck
production was 12,000 units and it was 9% less than same period of time year
earlier, and 38% less than fourth quarter 2011.
Over the long term Brazilian truck market has a good growth potential but the
truck production for full year 2012 will not reach the level achieved in year
2011. The estimate for heavy duty truck production year 2012 is 105,000 units
which close to 30% less than year 2011. The medium duty truck production
estimation is 52,000 units and compared to full year 2011 it represents decline
of more than 20%.
- Agricultural Equipment Industry
Worldwide agricultural equipment industry retail unit sales decreased 2%
compared to the first quarter of 2011. Global tractor sales were slightly down
(-2%) and global combine sales decreased 5% for the quarter. North American
sales of tractors over 40 horsepower were up 5% while combine sales were down
40% mainly due to equipment availability. Latin America sales of tractors and
combines decreased 8% and 1%, respectively, as a result of the drought
conditions. EAME & CIS markets improved for the quarter with tractor sales up
9% and combine sales up 21%. APAC unit retail sales were down 4% for tractors
and 33% for combines.
- Construction Equipment Industry
Global construction equipment industry sales declined 6% in the first quarter
compared to the prior year, as declining demand in China drove the APAC region
down 24%. Light equipment global demand was up 12% and heavy equipment demand
declined 19%, with the APAC region down 31%. The North American market
registered a substantial year-over-year improvement with demand up 45% (light
equipment volumes up 52% and heavy equipment up 30%). EAME & CIS markets
continued to improve, up 14%, as the industry continued to rebuild from the
prior year's low levels. Latin America demand was up 9% for light equipment and
down 1% for heavy equipment.
Electronics business
Demand for the products of PKC Group's key industrial electronics customers
decreased during the first quarter of 2012. The weakening was a result of
economic uncertainty in Europe and a reduction in wind power energy investments
globally.
Due to on-going product strategy changes of a telecommunications customer, the
demand for PKC's Electronics business' design and manufacturing services (ODM)
remained significantly lower than the previous year.
NET SALES AND FINANCIAL PERFORMANCE
January-March 2012
Net sales from January-March amounted to EUR 242.0 million (EUR 96.9 million),
up 149.7% on the same period a year earlier. During the report period EUR 0.3
million in non-recurring items were reported. During the comparison period no
non-recurring items were recorded. Operating profit before non-recurring items,
PPA depreciation and amortization totalled EUR 16.1 million, accounting for
6.7% of net sales. Consolidated operating profit totalled EUR 12.7 million (EUR
9.7 million), accounting for 5.3% of net sales (10.0%). Operating profit was
burdened by the losses of the Brazilian unit. Depreciation amounted to EUR 7.4
million (EUR 2.8 million). Depreciation caused by acquisitions amounted to EUR
3.2 million. Financial expenses were EUR 2.3 million (EUR 0.3 million).
Financial expenses include exchange rate gain totalling EUR 0.2 million net.
Profit before taxes was EUR 10.5 million (EUR 9.4 million). The amount of
income taxes increased during the report period. Net profit for the report
period totalled EUR 6.9 million (EUR 7.6 million). Diluted earnings per share
were EUR 0.33 (EUR 0.38).
Net sales generated by the Wiring Systems business in the report period
amounted to EUR 226.6 million (EUR 78.2 million), or 189.9% more than in the
comparison period. The segment's share of the consolidated net sales was 93.7%
(80.7%). Net sales increased along with the acquisition of AEES companies.
During the report period EUR 0.1 million in non-recurring items were reported.
During the comparison period no non-recurring items were recorded. Wiring
Systems business generated an operating profit before non-recurring items, PPA
depreciation and amortization of EUR 18.4 million (EUR 10.7 million),
equivalent to 8.1% of the segment's net sales (13.7%). Wiring Systems business
generated an operating profit of EUR 15.0 million (EUR 10.1 million),
equivalent to 6.6% of the segment's net sales (12.9%). The comparable
profitability weakened due to the losses of the Brazilian unit resulting from
low production volumes and costs related to the reorganisation of operations.
Net sales generated by the Electronics business decreased by 18.0% to EUR 15.3
million (EUR 18.7 million). The segment's share of the consolidated net sales
was 6.3% (19.3%). During the report period EUR 0.1 million in non-recurring
items were reported. During the comparison period no non-recurring items were
recorded. Electronics business generated an operating profit before
non-recurring items, PPA depreciation and amortization of EUR 0.9 million
negative, equivalent to -5.7% of the segment's net sales. Electronics business
generated an operating profit of EUR 1.0 million negative (EUR 0.4 million),
equivalent to -6.5% of the segment's net sales (2.4%). The decline of net sales
and operating profit is due to decreased demand of design and manufacturing
services (ODM) of production and service devices for telecommunication
industry. Decrease in demand was due to change of customer's product strategy.
Electronics segment's result was further burdened by costs related to
production transfers from Finland to more competitive production facilities.
FINANCIAL POSITION AND CASH FLOW
Consolidated total assets at 31 March 2012 amounted to EUR 529.1 million (EUR
230.2 million). Increase in total assets compared to comparison period is
mainly due to the business acquisitions. Interest-bearing liabilities totalled
EUR 160.0 million at the close of the report period (EUR 32.4 million). The
Group's equity ratio was 30.9% (52.4%). Net liabilities totalled EUR 85.1
million (EUR 4.6 million negative) and the gearing was 52.1% (3.8% negative).
Inventories amounted to EUR 108.4 million (EUR 63.4 million). Current
receivables totalled EUR 129.7 million (EUR 65.3 million). Net cash from
operating activities was EUR 25.9 million and cash flows after investments
during the report period were EUR 23.1 million (EUR 0.1 million). Cash and cash
equivalents amounted to EUR 74.9 million (EUR 37.0 million).
CAPITAL EXPENDITURE
During the report period, the Group's gross capital expenditure totalled EUR
4.8 million (EUR 2.5 million), representing 2.0% of net sales (2.6%). The
capital expenditure consisted mainly of production machinery and equipment.
RESEARCH & DEVELOPMENT
Research and development costs totalled EUR 2.0 million (EUR 1.6 million),
representing 0.8% (1.6%) of the consolidated net sales. At the end of the
report period, 156 (116) people worked in product development, excluding
production development and process development personnel.
PERSONNEL
During the report period, the Group had an average payroll of 21,955 employees
(6,234). At the end of the report period, the Group's personnel numbered 21,919
employees (6,407), of whom 21,564 (5,986) worked abroad and 355 (421) in
Finland. In addition the Group had at the end of the report period 283 rented
employees.
During the report period a total of 14 persons were laid off from PKC
Electronics Oy, which led to approximately EUR 0.1 million in non-recurring
expenses.
QUALITY AND THE ENVIRONMENT
All of the Group's factories are certified in accordance with requirements of
the ISO/TS16949 quality standard for the automotive industry excluding factory
in Traverse City (USA), which is certified in accordance with requirements of
ISO9001 standard. In addition all of the Group's factories, except factories in
Sosnowiec (Poland), Campo Alegre (Brazil) and Sao Bento do Sul (Brazil), are
certified in accordance with the ISO14001 environmental standard and all
factories operate in accordance with the ISO9001 quality standard. Production
units in Curitiba (Brazil), Itajuba (Brazil), Raahe (Finland) and Suzhou
(China) have also certification in accordance with the OHSAS18001 occupational
health and safety management system standard.
The certification in accordance with ISO14001 environmental standard in
Sosnowiec factory will be achieved after report period in May. The
certification in accordance with ISO14001 environmental standard in Campo
Alegre (Brazil) and Sao Bento do Sul (Brazil) is planned to be completed during
2012. The certification of occupational health and safety management system in
accordance with OHSAS18001 is in progress in electronics unit of Kostomuksha
(Russia). The aim is to achieve certification in the second quarter of 2012.
MANAGEMENT
The Annual General Meeting held on 4 April 2012, re-elected Outi Lampela, Matti
Ruotsala and Jyrki Tähtinen as Board members and elected Andres Allikmäe,
Shemaya Levy, Robert Remenar and Harri Suutari as new Board members. In the
Board's organisation meeting, Matti Ruotsala was elected as Chairman of the
Board with Harri Suutari as Vice-Chairman.
Outi Lampela was elected as the chairman of the Audit Committee and Andres
Allikmäe, Shemaya Levy and Jyrki Tähtinen as members. The Board decided to
expand the duties of the Nomination Committee and form it into Nomination and
Remuneration Committee. The Board elected Matti Ruotsala as chairman of the
Nomination and Remuneration Committee and Robert Remenar and Harri Suutari as
members.
Authorised public accounting firm KPMG Oy Ab, which has announced Virpi
Halonen, APA, to be the Auditor with principal responsibility, was selected as
auditor.
Matti Hyytiäinen has started as President & CEO as of 4 April 2012.
The Group's Executive Board shall consist of the following persons as of 4
April 2012 Matti Hyytiäinen, Chairman (President & CEO), Jyrki Keronen (Senior
Vice President, Business Development), Harri Ojala (President, Wiring Systems,
Europe & APAC), Sanna Raatikainen (General Counsel), Jarmo Rajala (President,
Electronics), Marja Sarajärvi, (CFO until 30 June 2012) and Frank Sovis
(President, Wiring Systems, North America). In addition, the following persons
have been appointed to the Executive Board from later dates: Pekka Korkala
(President, Wiring Systems, South America as of 1st of May 2012) and Juha
Torniainen (CFO as of 1 July 2012).
DIVIDEND FOR 2011
The Annual General Meeting held on 4 April 2012 resolved to pay a dividend of
EUR 0.60 per share: i.e. a total of about EUR 12.8 million. The dividend was
paid out on 18 April 2012.
SHARE TURNOVER AND SHAREHOLDERS
PKC Group Plc's share turnover on NASDAQ OMX Helsinki Ltd from 1 January to 31
March 2012 was 3,574,480 shares (2,884,673 shares), representing 17.2% of the
average number of shares (14.7%). Shares were traded to a total value of EUR
54.7 million (EUR 43.3 million). The lowest share value during the report
period was EUR 11.50 (EUR 13.90) and the highest EUR 18.30 (EUR 15.90). The
closing price on the last trading day of the report period was EUR 17.19 (EUR
15.63) and the average price during the report period was EUR 15.29 (EUR
15.02). The company's market capitalisation at 31 March 2012 was EUR 367.1
million (EUR 309.5 million).
The shares held by Board members, their closely associated persons and
corporations in which they have a controlling interest accounted for 1.5%
(0.7%) of the total number of shares at the end of the report period. PKC Group
Plc had a total of 8,982 shareholders (8,096) at the end of the report period.
The shares held by foreigners and through nominee registrations at the close of
the report period totalled 26.5% of the share capital (20.3%).
SHARES AND SHARE CAPITAL
PKC Group Plc's shares and share capital has changed during the report period
as follows:
-- A total of 110 PKC Group Plc's shares have been subscribed for with 2006B
options. The new shares and the corresponding increase in the share
capital, EUR 37.4, have been entered into the Trade Register on 12 January
2012. The new shares were traded on the main list of the NASDAQ OMX
Helsinki Ltd together with the old shares as of 13 January 2012. After the
increase the Company's registered share capital was EUR 6,103,098.92,
divided into 21,155,966 shares.
-- A total of 201,439 PKC Group Plc's shares have been subscribed for with
2006 options (101,040 with 2006B options and 100,399 with 2006C options).
The new shares and the corresponding increase in the share capital, EUR
68,489.26, have been entered into the Trade Register on 29 March 2012. The
new shares were traded on the main list of the NASDAQ OMX Helsinki Ltd
together with the old shares as of 30 March 2012. After the increase the
Company's registered share capital was EUR 6,171,588.18, divided into
21,357,405 shares.
THE BOARD'S AUTHORISATIONS
The Board of Directors was granted authorisation by the Annual General Meeting
on 30 March 2011 to decide on share issue and granting of special rights
defined in Chapter 10, Section 1 of the Companies Act and all the terms and
conditions thereof. A maximum total of 6,000,000 shares may be issued or
subscribed for on the basis of authorisation. The authorisation includes the
right to decide on directed share issue. The authorisation is in force for five
years from the date of the General Meeting's decision. At Board of Directors'
discretion the authorisation may be used e.g. in financing possible corporate
acquisitions, inter-company co-operation or similar arrangement, or
strengthening company's financial or capital structure etc. PKC Group Plc's
Board of Directors has, on the basis of the authorisation granted by the
shareholders' meeting on 30 March 2011, resolved on a directed share issue
without payment of 1,250,000 new shares to company's wholly owned subsidiary
PKC Group USA Inc for the payment of the purchase price for the shares in the
AEES-companies. After this share issue, a maximum total of 4,750,000 shares may
be issued or subscribed for on the basis of authorisation.
The Board of Directors does not possess a valid authorisation to acquire
company's own shares, and the company does not have any own shares (treasury
shares) in its possession.
AMENDMENT OF ARTICLES OF ASSOCIATION
The Annual General Meeting resolved on 4 April 2012, in accordance with the
Board of Directors proposal, to amend the 1§ of the Articles of Association so
that PKC Group Plc shall be defined to be the company's name in English and
that Helsinki be changed to be the company's domicile; 9§ so that the
invitation to the General Meeting be published on the Company's Internet pages
no more than three (3) months and no less than three (3) weeks prior to the
meeting; 10§ so that he meeting shall be held at Company's domicile.
STOCK OPTION SCHEMES
2006 options
The stock option scheme initiated in 2006, comprises a total of 697,500 options
divided into A, B and C warrants. At the close of report period, the
outstanding options and options held by key personnel totals 28,780 2006B
warrants and 108,987 2006C warrants.
The share subscription price for the 2006 stock options is the volume-weighted
average price of the PKC Group Plc share on NASDAQ OMX Helsinki, with dividend
adjustments, as defined in the stock option terms (at present, EUR 8.94 for the
2006B and 2006C warrants). Through the exercise of the 2006 stock options, the
share capital of PKC Group Plc may be increased by a maximum total of 697,500
new shares and EUR 237,150. After the registration of subscription made on 29
March 2012, the Company's share capital can increase by a maximum of 139,417
shares i.e. EUR 47,401.78 as a result of the exercise of the remaining
outstanding option rights. The share subscription period is for 2006B warrants
1 April 2010 - 30 April 2012, and for 2006C warrants 1 April 2011 - 30 April
2013. The 2006 stock options are subject to a share ownership plan. Key
personnel are obliged 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 obliged to own these shares for
the duration of his managerial contract.
The share subscription period for 2006A warrants has ended 30 April 2011.
During the share subscription period a total 200,300 shares were subscribed and
2,200 warrants remained unused.
2009 options
The Annual General Meeting held on 27 March 2009 decided to issue stock options
to key personnel in the company and its subsidiaries. The maximum total number
of stock options issued is 600,000 and they are divided into A, B and C
warrants. At the close of the report period, the outstanding options and
options held by key personnel totals 195,500 2009A, 200,000 2009B and 200,000
2009C warrants.
The subscription price for shares through the exercise of the 2009 stock
options is the volume-weighted average price of the PKC Group Plc share on
NASDAQ OMX Helsinki for April 2009, 2010 and 2011 + 20% with dividend
adjustments, (at present, EUR 2.30 for the 2009A warrants, EUR 12.11 for the
2009B warrants and EUR 17.98 for the 2009C warrants). The subscription price
for shares will be recorded in the invested non-restricted equity fund. The
stock options entitle their owners to subscribe for a maximum total of 600,000
new shares in the company or existing shares held by the company. The share
subscription period for 2009A warrants is 1 April 2012 — 30 April 2014, for
2009B warrants 1 April 2013 — 30 April 2015 and for 2009C warrants 1 April 2014
— 30 April 2016. The 2009 stock options are subject to a share ownership plan.
Key personnel are obliged 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 obliged to own these shares
for the duration of his managerial contract.
2012 options
The Annual General Meeting held on 4 April 2012 decided to issue stock options
to key personnel in the company and its subsidiaries. The maximum total number
of stock options issued is 1,020,000. The stock options are marked with the
symbol 2012A(i) and 2012A(ii); 2012B(i) and 2012B(ii); as well as 2012C(i) and
2012C(ii). A total of 170,000 stock options are included in each stock option
class.
The subscription price for shares through the exercise of the 2012 stock
options is the volume-weighted average price of the PKC Group Plc share on
NASDAQ OMX Helsinki Ltd during first quarter in 2012, 2013 and 2014. The share
subscription price is EUR 15.31 with the 2012A options. The subscription price
for shares will be recorded in the invested non-restricted equity fund. The
stock options entitle their owners to subscribe for a maximum total of
1,020,000 new shares in the company or existing shares held by the company. The
share subscription period for stock options 2012A, will be 1 April 2015—30
April 2017, for stock options 2012B, 1 April 2016—30 April 2018, and for stock
options 2012C, 1 April 2017—30 April 2019. The share subscription period for
stock options 2012A(ii), 2012B(ii) and 2012C(ii) shall, however, not commence,
unless certain operational or financial targets of the Group established for
the exercise of stock options and determined by the Board of Directors have
been attained. The Board of Directors shall annually decide on targets
separately for each stock option class in connection with the distribution of
stock options. Those stock options, for which the targets determined by the
Board of Directors have not been attained, shall expire in the manner decided
by the Board of Directors. The 2012 stock options are subject to a share
ownership plan. Key personnel are obliged 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 obliged to
own these shares for the duration of his managerial contract.
SHORT-TERM RISKS AND UNCERTAINTIES
The public deficit and high indebtedness of many European countries and the
United States may weaken economic growth and availability of financing for
investment goods and increase uncertainty in the markets.
The resin shortage following a factory shutdown of German raw material
manufacturer may cause some component availability problems and thus affect
also sales, if alternative raw material or components cannot be found, and it
may also have indirect effect on PKC's sales if customers' production is
affected due to component problems.
A potential weakening of the euro against the Polish zloty and the Russian
rouble as well as the potential weakening of the USD against the Mexican peso
may increase PKC's processing costs.
A significant increase in copper price may weaken PKC Group's profit in short
term. The customer prices are updated on average with 5 month delay on the
basis of copper price changes.
OUTLOOK FOR THE FUTURE
PKC expects that its net sales and comparable operating profit will increase in
2012 from the previous year's level. Net sales in 2011 amounted to EUR 550.2
million and operating profit without non-recurring items was EUR 42.6 million.
Major part of net sales and profit is generated by the Wiring Systems business.
FINANCIAL REPORTS IN 2012
In 2012, the Interim Reports will be published as follows:
Interim Report 1-6/2012 Thursday, August 9, 2012 at about 8.15 a.m.
Interim Report 1-9/2012 Thursday, November 1, 2012 at about 8.15 a.m.
The text section of this release focuses on the interim report. Comparisons in
accordance with IFRS standards have been made to the figures of the
corresponding period in 2011, unless otherwise mentioned. The figures presented
in the tables are independently rounded figures.
TABLES
The quartely figures have not been audited. This interim report has been
prepared in accordance with IAS 34 (Interim Financial Reporting) standard. The
interim report has been prepared in accordance with the same principles as the
annual financial statements for 2011. The year 2012 IFRS standard changes have
not had any effect.
CONSOLIDATED STATEMENT OF COMPREHENSIVE 1-3/12 1-3/11 1-12/11
INCOME (EUR 1,000) 3 mon. 3 mon. 12 mon.
NET SALES 241,967 96,886 550,208
Other operating income 330 657 4,042
Increase (+) / decrease (-) in stocks of -733 1,664 -1,679
finished goods and work in progress
Production for own use 21 0 208
Materials and services 147,690 60,220 332,646
Employee benefit expenses 50,395 18,725 109,800
Depreciation 7,360 2,813 17,531
Other operating expenses 23,406 7,780 58,296
OPERATING PROFIT 12,735 9,670 34,505
Interest expenses -1,647 -538 -4,253
Other financial income 47 247 599
Other financial expenses -661 0 -1,437
PROFIT BEFORE TAXES 10,474 9,380 29,414
Income tax -3,579 -1,788 -5,969
PROFIT FOR THE REPORT PERIOD 6,895 7,592 23,445
Other comprehensive income:
Interest derivatives -208 0 -464
Foreign currency translation differences 3,614 -2,739 -1,112
- foreign operations
Total comprehensive income for the period 10,300 4,853 21,869
Attributable to equity holders of the
parent company:
Basic earnings per share (EPS), EUR 0.33 0.39 1.18
Diluted earnings per share (EPS), EUR 0.33 0.38 1.16
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 3/12 3/11 12/11
1,000)
ASSETS
NON-CURRENT ASSETS
Goodwill 30,701 15,256 29,813
Other intangible assets 48,774 8,588 50,099
Property, plant and equipment 103,762 36,060 113,556
Deferred tax assets 9,920 4,585 7,697
Other receivables 22,926 40 20,207
Total non-current assets 216,083 64,529 221,371
CURRENT ASSETS
Inventories 108,417 63,372 110,526
Receivables
Trade receivables 104,116 47,651 103,965
Other receivables 22,861 17,381 20,490
Current tax assets 2 717 246 165
Total receivables 129,694 65,278 124,621
Cash and cash equivalents 74,940 36,986 52,280
Total current assets 313,051 165,636 287,426
Total assets 529,133 230,165 508,798
EQUITY AND LIABILITIES
EQUITY
Share capital 6,174 6,067 6,103
Share premium account 10,114 7,291 8,259
Invested non-restricted equity fund 34,444 21,840 35,639
Translation reserve 9,671 842 6,257
Fair value reserve -672 0 -464
Share-based payments 2,541 1,845 2,340
Retained earnings 94,215 75,078 70,902
Profit for the report period 6,895 7,592 23,445
Total equity 163,381 120,555 152,482
LIABILITIES
Non-current liabilities
Interest-bearing liabilities 140,925 24,310 146,789
Non-interest-bearing liabilities 27,343 0 24,321
Provisions 1,365 449 1,541
Deferred tax liabilities 29,587 5,751 32,957
Total non-current liabilities 199,220 30,509 205,608
Current liabilities
Interest-bearing liabilities 19,113 8,053 16,230
Trade payables 101,566 36,007 90,779
Other non-interest-bearing liabilities 45,853 35,041 43,700
Total current liabilities 166,532 79,101 150,708
Total liabilities 365,752 109,610 356,316
TOTAL EQUITY AND LIABILITIES 529,133 230,165 508,798
CONSOLIDATED STATEMENT OF CASH FLOWS 1-3/12 1-3/11 3 1-12/11 12
(EUR 1,000) 3 mon. mon. mon.
Cash flows from operating activities
Cash receipts from customers 263,345 96,562 564,533
Cash receipts from other operating 117 624 5,357
activities
Cash paid to suppliers and employees -246,810 -94,771 -520,867
Cash flows from operations before financial 16,651 2,416 49,022
income and expenses and taxes
Interest paid and financial expenses -1,644 -449 -3,695
Translation difference 204 553 2,489
Interest received 47 29 1,995
Income taxes paid 10,644 -132 -9,822
Net cash from operating activities (A) 25,903 2,415 39,990
Cash flows from investing activities
Acquisition of property and equipment and -3,351 -2,468 -11,845
intangible assets
Proceeds from sale of property and 234 179 1,393
equipment and intangible assets
Acquisitions of subsidiaries 0 0 -79,565
Loans granted 0 0 -514
Proceeds from repayments of loans 314 0 16
Dividends received 0 0 301
Net cash used in investment activities (B) -2,803 -2,289 -90,213
Cash flows after investments 23,099 127 -50,223
Cash flows from financing activities
Drawing of long-term borrowings 71 0 153,703
Drawing of short-term borrowings 5,000 0 12,175
Share issue 1,923 2,509 4,000
Repayment of short-term/long-term -6,700 -2,607 -93,596
borrowings
Dividends paid 0 0 -10,890
Net cash used in financing activities (C) 295 -98 65,391
Net increase (+) or decrease (-) in cash 23,394 29 15,168
and equivalents (A+B+C)
Cash and cash equivalents in the beginning 52,280 37,104 37,104
of the period
Effect of exchange rate fluctuations -734 -147 8
Cash and cash equivalents in the end of the 74,940 36,986 52,280
period
KEY FINANCIAL INDICATORS 1-3/12 3 mon. 1-3/11 3 mon. 1-12/11 12
mon.
Net sales, EUR 1,000 241,967 96,886 550,208
Operating profit, EUR 1,000 12,735 9,670 34,505
% of net sales 5.3 10.0 6.3
Profit before taxes, EUR 1,000 10,474 9,380 29,414
% of net sales 4.3 9.7 5.3
Net profit for the period, EUR 6,895 7,592 23,445
1,000
% of net sales 2.8 7.8 4.3
Return on equity (ROE), % 17.5 24.9 17.0
Return on investments (ROI), % 21.2 28.3 18.9
Net liabilities, EUR 1,000 85,098 -4,624 110,739
Gearing, % 52.1 -3.8 72.6
Equity ratio, % 30.9 52.4 30.0
Current ratio 1.9 2.1 1.9
Gross capital expenditure, EUR 4,759 2,535 101,532
1,000
% of net sales 2.0 2.6 18.5
R&D expenditures, EUR 1,000 2,040 1,579 6,922
% of net sales 0.8 1.6 1.3
Personnel average 21,955 6,234 10,793
PER-SHARE KEY INDICATORS 1-3/12 3 1-3/11 3 1-12/11 12
mon. mon. mon.
Earnings per share (EPS), EUR 0.33 0.39 1.18
Earnings per share (EPS),diluted, EUR 0.33 0.38 1.16
Equity per share, EUR 7.65 6.09 7.66
Share price at close of period, EUR 17.19 15.63 11.48
Lowest share price, EUR 11.50 13.90 8.60
Highest share price, EUR 18.30 15.90 18.36
Average share price, EUR 15.29 15.02 13.44
Turnover in shares, 1,000 shares 3,574 2,885 11,804
Turnover in shares per (share issue 17.2 14.7 59.6
adjusted) share capital, %
Average number of shares, 1,000 shares 20,737 19,591 19,816
Average number of shares, diluted, 1,000 21,054 19,999 20,127
shares
Shares at end of period, 1,000 shares 21,357 19,801 19,906
Unlisted shares at the end of period, 1,000 0 0 1,250
shares
Market capitalisation, EUR 1,000 367,134 309,483 228,519
1. SEGMENT INFORMATION
1.1.-31.3.2012 (EUR 1,000) Wiring Electro Unallocated amounts Group
Systems nics and eliminations Total
Sales to external customers 226,620 15,347 0 241,967
Sales to other segments 156 23 -178 0
Net sales 226,776 15,370 -178 241,967
Operating profit before 15,171 -867 -1,307 12,996
non-recurring items
% of net sales 6.7 -5.7 5.4
Non-recurring employee 125 136 0 261
benefit expenses
Total non-recurring other 125 136 0 261
operating items
Operating profit 15,046 -1,003 -1,307 12,735
% of net sales 6.6 -6.5 5.3
Segment's assets 492,257 45,045 -18,088 519,213
Unallocated assets *) 9,920 9,920
Total assets 492,257 45,045 -8,168 529,133
*) Segment's assets do not include deferred taxes
1.1.-31.3.2011 (EUR 1,000) Wiring Electro Unallocated amounts Group
Systems nics and eliminations Total
Sales to external customers 78,174 18,712 0 96,886
Sales to other segments 153 16 -169 0
Net sales, EUR 1,000 78,327 18,728 -169 96,886
Operating profit before 10,103 443 -876 9,670
non-recurring expenses
% of net sales 12.9 2.4 10.0
Total non-recurring expenses 0 0 0 0
Operating profit 10,103 443 -876 9,670
% of net sales 12.9 2.4 10.0
Segment's assets 165,633 48,575 11,372 225,580
Unallocated assets *) 4,585 4,585
Total assets 165,633 48,575 15,957 230,165
*) Segment's assets do not include deferred taxes
1.1.-31.12.2011 (EUR 1,000) Wiring Electro Unallocated amounts Group
Systems nics and eliminations Total
Sales to external customers 477,212 72,995 0 550,208
Sales to other segments 755 132 -887 0
Net sales 477,967 73,127 -887 550,208
Operating profit before 42,467 2,825 -3,326 41,967
non-recurring items
% of net sales 8.9 3.9 7.6
Donations to the 0 150 0 150
universities
Advisor fees 7,100 0 0 7,100
Cancellation of the -317 0 0 -317
write-down of inventories
Non-recurring employee 218 310 0 528
benefit expenses
Total non-recurring other 7,001 460 0 7,461
operating items
Operating profit 35,466 2,365 -3,326 34,505
% of net sales 7.4 3.2 6.3
Segment's assets 483,593 48,910 -31,402 501,101
Unallocated assets *) 7,697 7,697
Total assets 483,593 48,910 -23,706 508,798
*) Segment's assets do not include deferred taxes
NET SALES BY GEOGRAPHICAL LOCATIONS 1-3/12 3 1-3/11 3 1-12/11 12
(EUR 1,000) mon. mon. mon.
Finland 12,991 15,586 62,521
Other Europe 58,047 54,825 236,006
North America 148,043 6,370 157,458
South America 18,358 15,782 73,514
Other countries 4,529 4,322 20,708
Total 241,967 96,886 550,208
2. CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY (EUR MILLION)
A = Share Capital
B = Share premium account
C = Invested non-restricted equity
fund
D = Fair value reserve
E = Translation difference
F = Retained earnings
G = Total equity
A B C D E F G
Equity at 1.1.2011 6.0 4.9 21.8 0.0 7.6 83.5 123.7
Dividends 0.0 0.0 0.0 0.0 0.0 -10.7 -10.7
Share-based payments 0.0 0.0 0.0 0.0 0.0 0.2 0.2
Subscription of shares 0.1 2.4 0.0 0.0 0.0 0.0 2.5
Comprehensive income for the period 0.0 0.0 0.0 0.0 -2.7 7.6 4.9
Other changes 0.0 0.0 0.0 0.0 0.0 -0.1 -0.1
Equity at 31.3.2011 6.1 7.3 21.8 0.0 4.9 80.5 120.6
Equity at 1.1.2012 6.1 8.3 35.6 -0.5 6.3 96.7 152.5
Share-based payments 0.0 0.0 0.0 0.0 0.0 0.2 0.2
Share issue, exercise of options 0.1 1.8 0.0 0.0 0.0 0.0 1.9
Comprehensive income for the period 0.0 0.0 0.3 -0.2 3.3 6.9 10.3
Other changes 0.0 0.0 -1.5 0.0 0.0 0.0 -1.5
Equity 31.3.2012 6.2 10.1 34.4 -0.7 9.6 103.8 163.4
3. PROPERTY, PLANT AND EQUIPMENT (EUR 1,000) 3/12 3/11
Acquisition cost 1.1. 141,551 76,270
+ Additions 4,045 2,241
- Disposals -452 -331
Acquisition cost 31.3. 145,144 78,180
Accumulated depreciation 1.1. 35,182 40,378
- Accumulated depreciation on disposals -166 -174
+ Depreciation 6,550 1,893
+/- Exchange difference -184 10
Depreciation 31.3. 41,382 42,107
Carrying amount 31.3. 103,762 36,073
4. OTHER INTANGIBLE ASSETS (EUR 1,000) 3/12 3/11
Acquisition cost 1.1. 104,828 39,208
+ Additions 714 294
+/- Other changes 888 0
Acquisition cost 31.3. 106,430 39,502
Accumulated depreciation 1.1. 25,539 14,763
- Accumulated depreciation on disposals 422 0
+ Depreciation 1,024 891
+/- Exchange difference -30 5
Depreciation 31.3. 26,955 15,659
Carrying amount 31.3. 79,475 23,843
5. CONTINGENT LIABILITIES AT END OF PERIOD (EUR 1,000) 3/12 3/11 12/11
Leasing liabilities 1,741 2,715 1,898
Liabilities for derivative instruments
Nominal values
Interest rate swaps 41,341 0 45,974
Currency derivatives
Forward contracts 14,806 355 5,944
Copper derivatives
Forward contracts 2,784 2,477 2,450
Total 58,931 2,833 54,367
Fair values
Interest rate swaps -694 0 -480
Currency derivatives
Forward contracts 169 -3 -64
Copper derivatives
Forward contracts 69 -155 188
Total -456 -158 -356
Currency and copper derivatives are used only in hedging currency and copper
risks. PKC Group does not apply hedge accounting to currency and copper
derivative instruments in accordance with IAS 39. Fair values of currency and
copper derivatives are recognised through profit and loss. PKC Group applies
hedge accounting to interest rate swaps.
6. QUARTERLY KEY 10-12/10 1-3/10 4-6/11 7-9/11 10-12/1 1-3/12
INDICATORS, 3 mon. 3 mon. 3 mon. 3 mon. 1 3 3 mon.
CONSOLIDATED mon.
Net sales, EUR million 91.9 96.9 109.3 102.0 242.0 242.0
Operating profit, EUR 9.8 9.7 7.1 9.0 8.8 12.7
million
% of net sales 10.6 10.0 6.5 8.8 3.6 5.3
Profit before taxes, EUR 6.6 9.4 7.7 4.6 7.7 10.5
million
% of net sales 7.2 9.7 7.0 4.5 3.2 4.3
Equity ratio, % 56.5 52.4 54.3 36.1 30.0 30.9
Earnings per share (EPS), 0.29 0.38 0.31 0.19 0.29 0.33
diluted (EUR)
Equity per share, EUR 6.33 6.09 6.38 6.44 7.66 7.65
QUARTERLY KEY INDICATORS,
WIRING SYSTEMS
Net sales, EUR million 70.8 78.2 90.2 84.3 224.5 226.6
Operating profit, EUR 8.7 10.1 9.6 7.1 8.7 15.0
million
% of net sales 12.3 12.9 10.6 8.4 3.9 6.6
QUARTERLY KEY INDICATORS,
ELECTRONICS
Net sales, EUR million 21.1 18.7 19.1 17.7 17.5 15.3
Operating profit, EUR 2.0 0.4 0.4 1.7 -0.2 -1.0
million
% of net sales 9.6 2.4 2.1 9.8 -1.2 -6.5
CALCULATION OF INDICATORS
Return on equity (ROE), %
= 100 x Profit for the report period / Total equity (average)
Return on investments (ROI), %
= 100 x (Profit before taxes + financial expenses) / (Total equity +
interest-bearing liabilities (average))
Gearing, %
= 100 x (Interest-bearing liabilities - cash and cash equivalents) / Total
equity
Equity ratio, %
= 100 x Total equity / (Total of the statement of financial position - advance
payments received)
Current ratio
= Total current assets / Total current liabilities
Earnings per share (EPS), EUR
= Profit for the report period attributable to equity holders of the parent
company / Average share issue-adjusted number of shares
Shareholders' equity per share, EUR
= Equity attributable to equity holders of the parent company / Share
issue-adjusted number of shares at the date of the statement of financial
position
Market capitalisation
= Number of shares at the end of the report period x the last trading price of
the report 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 and
information published by market research companies and customers. 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 PLC
Board of Directors
Matti Hyytiäinen
President and CEO
For additional information, contact:
Matti Hyytiäinen, President & CEO, PKC Group Plc, +358 400 710 968
PRESS CONFERENCE
A press conference on the interim report will be arranged for analysts and
investors today, 4 May 2012, at 10.00 a.m., at the address World Trade Center,
Aleksanterinkatu 17, meeting room 2, 2nd floor, Helsinki.
DISTRIBUTION
NASDAQ OMX
Main media
www.pkcgroup.com
The PKC Group offers design and contract manufacturing services for wiring
systems and electronics. The Group has production facilities in Brazil, China,
Estonia, Finland, Germany, Ireland, Mexico, Poland, Russia, Ukraine and the
USA. The Group's net sales in 2011 totalled EUR 550.2 million. PKC Group Plc is
listed on NASDAQ OMX Helsinki Ltd.
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