2011-08-04 07:15:00 CEST
2011-08-04 07:15:09 CEST
REGULATED INFORMATION
PKC Group Oyj - Interim report (Q1 and Q3)
PKC GROUP'S INTERIM REPORT 1-6/2011
PKC Group Oyj INTERIM REPORT 4 August 2011 8.15 a.m.
PKC GROUP'S INTERIM REPORT 1-6/2011
-- Consolidated net sales grew 45.4% on the comparison period (1-6/2010),
totalling EUR 206.2 million (EUR 141.8 million).
-- Consolidated operating profit was EUR 16.7 million (EUR 10.4 million) i.e.
8.1% (7.3%) of net sales. Comparable operating profit without non-recurring
items was EUR 18.9 million (EUR 11.0 million), 9.2% (7.8%) of net sales.
-- Profit for the report period amounted to EUR 13.9 million (EUR 4.4
million).
-- Diluted earnings per share were EUR 0.69 (EUR 0.25).
-- Cash flows after investments were EUR 9.1 million negative (EUR 3.2 million
negative).
-- Gearing was 14.8% (42.1%).
-- Equity ratio was 54.3% (47.7%)
-- Net liabilities were EUR 18.7 million (EUR 37.1 million).
-- PKC Group announced on 28 February 2011 that it had signed an agreement for
the purchase of shares in the Segu companies. The requirements of closing
have been fulfilled and the closing became effective on April 30, 2011.
KEY FIGURES 1-6/11 1-6/10 1-12/10
Net sales, EUR 1,000 206,193 141,839 316,081
Operating profit, EUR 1,000 16,745 10,415 29,689
% of net sales 8.1 7.3 9.4
Profit for the report period, EUR 1,000 13,854 4,438 19,683
Earnings per share (EPS), EUR 0.69 0.25 1.09
ROI,% 27.7 23.8 25.8
Net liabilities, EUR 1,000 18,727 37,085 -2,068
Gearing, % 14.8 42.1 -1.7
Average number of personnel 6,513 4,568 5,039
HARRI SUUTARI, PRESIDENT AND CEO:
”The manufacture of commercial vehicles, tractors and industrial equipment
continued to grow in our key market areas in Europe and Brazil. The production
of recreation vehicles also continued to grow in Europe and North America.
PKC's Wiring Harnesses business continued to grow, by about 15% over the
previous quarter. Our customers' volume of orders received during the second
quarter for trucks remained at the same level as deliveries. The profitability
of the Wiring Harnesses business fell in comparison with the previous quarter
as a result of an increase in material and manufacturing costs and a drop in
some product sales prices. Production transfers to lower cost factories will be
continued according to plan.
Deliveries in the Electronics business remained at the level of the previous
quarter. Deliveries from Electronics Manufacturing Services (EMS) continued to
grow, but deliveries from Original Design Manufacturing (ODM) fell during the
first half of the year. As a result of weakened profitability, special measures
to improve profitability will be targeted at the Electronics business.
In line with our strategy, our aim is not only organic growth but also through
acquisitions.”
OPERATING ENVIRONMENT
Wiring Harness business
European heavy-duty trucks' markets strengthened during the report period.
During the first half of the year, the registrations of heavy-duty trucks
increased in Europe (the EU countries, Switzerland and Norway) by 56% over the
comparison period. All in all, about 120,000 heavy trucks were registered
during the first half of the year. During the second quarter, a total of almost
62,000 new heavy-duty trucks were registered. During the second quarter, the
number of vehicle orders received by our customers was at about the same level
as the number of vehicles delivered to their customers. Deliveries for the full
year are forecast to increase to 230,000 - 250,000 vehicles.
In Brazil during the first half of the year, our key customers' heavy truck
deliveries increased by 20% over the comparison period. The vehicle orders
received by our customers were 16% less than volume of customer deliveries
during the second quarter, which indicates a turn in growth. The changes in
emissions regulations scheduled to enter into force at the end of this year are
expected to increase production towards the end of the year. In 2010, about
110,000 heavy-duty trucks were registered in Brazil. The industry expects
registrations over the full year to increase by about 10% over the previous
year.
Deliveries for heavy-duty trucks in North America increased during the first
half of the year by approximately 45% compared to the comparison period
totalling approximately 93,000 vehicles. Truck manufacturers combined orderbook
was about 125,000 heavy duty trucks at the end of June. Deliveries for the full
year are forecast to be 180,000-250,000 vehicles.
PKC's delivery volumes for recreation vehicle wiring harnesses increased in the
first half of the year in North America by 30% over the corresponding period
the previous year.
Sales of agricultural tractors in Europe increased during the first half of the
year by 14% over the comparison period the previous year. Full year sales are
forecast to grow by 15%.
Sales of construction equipment increased during the first half of the year by
44% in Europe and by 28% in South America over the comparison period the
previous year. Full year sales are forecast to grow by 15-25% in Europe and by
10-20% in South America.
Production volumes of forestry equipment in Europe increased during the first
half of the year by 40% over the comparison period the previous year.
Although PKC Group does not have its own wiring harness production in Asia,
growing export to Asia by our customers is supporting the growth of PKC's
production volumes.
Electronics business
Demand for electronic subcontracting services remained at the level of the
previous quarter in PKC's key markets. The availability of electronic
components improved.
Deliveries by PKC's Electronics business increased over the comparison period,
but failed to reach the level of the previous quarter on account of the
postponement of certain customer projects.
NET SALES AND FINANCIAL PERFORMANCE
April-June 2011
Consolidated net sales from April-June amounted to EUR 109.3 million (EUR 81.0
million), up 34.9% on the same period a year earlier. Consolidated operating
profit totalled EUR 7.1 million (EUR 7.6 million), accounting for 6.5% of net
sales (9.4%). During the report period were reported EUR 1.8 million in
non-recurring items. During the comparison period no non-recurring items were
reported. Depreciation amounted to EUR 3.2 million (EUR 2.7 million). Financial
items were EUR 0.6 million (EUR 2.9 million negative). Financial items contain
exchange rate profit totalling EUR 0.9 million net. Profit before taxes was EUR
7.7 million (EUR 4.7 million). Profit for the report period totalled EUR 6.3
million (EUR 4.2 million). Diluted earnings per share were EUR 0.31 (EUR 0.24).
Net sales generated by the Wiring Harness business in the report period
amounted to EUR 90.2 million (EUR 64.1 million), or 40.7% more than in the
comparison period. The segment's share of the consolidated net sales was 82.5%
(79.1%). Wiring Harness business generated an operating profit of EUR 9.6
million (EUR 7.0 million), equivalent to 10.6% of the segment's net sales
(10.9%). During the report period were reported EUR 0.1 million in
non-recurring items. During the comparison period no non-recurring items were
reported. The improvement of operating profit is due to increased delivery
volumes and efficient cost base.
Net sales generated by the Electronics business increased by 13.0% to EUR 19.1
million (EUR 16.9 million). The segment's share of the consolidated net sales
was 17.5% (20.9%). Electronics business generated an operating profit of EUR
0.4 million (EUR 1.1 million), equivalent to 2.1% of the segment's net sales
(6.5%). During the report period were reported EUR 0.2 million in non-recurring
expenses. During the comparison period no non-recurring items were recorded.
The decline of operating profit is due to postponement of some customer
projects and costs related to production transfers.
January-June 2011
Consolidated net sales from January-June amounted to EUR 206.2 million (EUR
141.8 million), up 45.4% on the same period a year earlier. Consolidated
operating profit totalled EUR 16.7 million (EUR 10.4 million), accounting for
8.1% of net sales (7.3%). During the report period were reported EUR 2.2
million (EUR 0.6 million) in non-recurring items. Depreciation amounted to EUR
6.1 million (EUR 5.5 million). Financial items were EUR 0.3 million (EUR 5.4
million negative). Financial items contain exchange rate profit totalling EUR
1.1 million net. Profit before taxes was EUR 17.1 million (EUR 5.0 million).
Profit for the report period totalled EUR 13.9 million (EUR 4.4 million).
Diluted earnings per share were EUR 0.69 (EUR 0.25).
Net sales generated by the Wiring Harness business in the report period
amounted to EUR 168.3 million (EUR 109.8 million), or 53.3% more than in the
comparison period. The segment's share of the consolidated net sales was 81.6%
(77.4%). Wiring Harness business generated an operating profit of EUR 19.7
million (EUR 9.0 million), equivalent to 11.7% of the segment's net sales
(8.2%). During the report period were reported EUR 0.1 million (EUR 0.6
million) in non-recurring items. The improvement of operating profit is due to
increased delivery volumes and efficient cost base.
Net sales generated by the Electronics business increased by 18.2% to EUR 37.9
million (EUR 32.0 million). The segment's share of the consolidated net sales
was 18.4% (22.6%). Electronics business generated an operating profit of EUR
0.8 million (EUR 2.4 million), equivalent to 2.2% of the segment's net sales
(7.5%). During the report period were reported EUR 0.2 million in non-recurring
expenses. During the comparison period no non-recurring items were recorded.
The decline of operating profit is due to postponement of some customer
projects and costs related to production transfers.
FINANCIAL POSITION AND CASH FLOW
Consolidated total assets at 30 June 2011 amounted to EUR 233.7 million (EUR
184.7 million). Interest-bearing liabilities totalled EUR 33.8 million at the
close of the report period (EUR 44.7 million). The Group's equity ratio was
54.3% (47.7%). Net liabilities totalled EUR 18.7 million (EUR 37.1 million) and
the gearing was 14.8% (42.1%).
Inventories amounted to EUR 71.1 million (EUR 44.5 million). Current
receivables totalled EUR 68.1 million (EUR 66.5 million). Cash flows after
investments during the report period were EUR 9.1 million negative (EUR 3.2
million negative). Cash and cash equivalents amounted to EUR 15.1 million (EUR
7.6 million). In order to ensure financing flexibility, PKC has available a
total of EUR 15 million financing and credit facilities, of which EUR 15
million has remained unused.
CAPITAL EXPENDITURE
During the report period, the Group's gross capital expenditure totalled EUR
19.5 million (EUR 3.3 million), representing 9.5% of net sales (2.4%). The
capital expenditure consisted, in addition to the acquisition of Segu
companies, mostly of acquisition of production machinery and equipment.
RESEARCH & DEVELOPMENT
Research and development costs totalled EUR 3.2 million (EUR 2.8 million),
representing 1.6% (2.0%) of the consolidated net sales. At the end of the
report period, 121 (114) people worked in product development.
PERSONNEL
During the report period, the Group had an average payroll of 6,513 employees
(4,568). At the end of the report period, the Group's personnel numbered 7,399
employees (5,076), of whom 7,027 (4,554) worked abroad and 372 (522) in
Finland. At the end of the report period, the Segu companies' personnel
numbered 1,125 employees. In addition the Group had at the end of the report
period 1,056 rented employees.
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. All of the
Group's factories, except factories in Sosnowiec (Poland) and Mukachevo
(Ukraine) are certified in accordance with the ISO9001 quality standard and
with the ISO14001 environmental standard. Production unit in Curitiba (Brazil)
has also certification in accordance with the OHSAS18001 occupational health
and safety management system standard.
The Sosnowiec and Mukachevo factories have started to build a system in
accordance with ISO14001 environmental standard with the aim to certify it in
the first quarter of 2012. During 2011 occupational health and safety
management system will be implemented to all Eletronics units in conformity
with the OHSAS18001 standard.
MANAGEMENT
The Annual General Meeting held on 30 March 2011, re-elected Matti Hyytiäinen,
Outi Lampela, Endel Palla, Olli Pohjanvirta, Matti Ruotsala and Jyrki Tähtinen
as Board members. In the Board's organisation meeting, Matti Ruotsala was
elected as Chairman of the Board with Jyrki Tähtinen as Vice-Chairman.
Outi Lampela was elected as chairman of the Audit Committee with Matti
Hyytiäinen and Olli Pohjanvirta as its members. The Board of Directors also
elected Matti Ruotsala as chairman of the Nomination Committee and Endel Palla
and Jyrki Tähtinen 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.
The Group's Executive Board consists of the following persons: Harri Suutari,
Chairman (President and CEO); Harri Ojala (President, Wiring Harnesses); Jarmo
Rajala (President, Electronics); Sanna Raatikainen (General Counsel); Marja
Sarajärvi (CFO); and Jarkko Kariniemi (Director, HR and Risk Management).
DIVIDEND FOR 2010
The annual general meeting held on 30 March 2011 resolved to pay a dividend of
EUR 0.55 per share: i.e. a total of about EUR 10.9 million. The dividend was
paid out on 11 April 2011.
SHARE TURNOVER AND SHAREHOLDERS
PKC Group Oyj's share turnover on NASDAQ OMX Helsinki Ltd from 1 January to 30
June 2011 was 5,402,828 shares (6,712,107 shares), representing 27.4% of the
average number of shares (37.7%). Shares were traded to a total value of EUR
84.2 million (EUR 65.0 million). The lowest share value during the report
period was EUR 13.90 (EUR 6.55) and the highest EUR 18.36 (EUR 11.90). The
closing price on the last trading day of the report period was EUR 15.78 (EUR
10.87) and the average price during the period was EUR 15.59 (EUR 10.69). The
company's market capitalisation at 30 June 2011 was EUR 314.1 million (EUR
193.3 million).
The shares held by Board members, their closely associated persons and
corporations in which they have a controlling interest accounted for 0.7%
(0.8%) of the total number of shares at the end of the report period. PKC Group
Oyj had a total of 8,123 shareholders (6,853) at the end of the report period.
The shares held by foreigners and through nominee registrations at the close of
the report period totalled 22.9% of the share capital (15.5%).
SHARES AND SHARE CAPITAL
PKC Group Oyj's shares and share capital has changed during the report period
as follows:
-- A total of 103,840 PKC Group Oyj's shares have been subscribed for with
2006 options (32,060 with 2006A options, 20,780 with 2006B options and
51,000 with 2006C options). The new shares and the corresponding increase
in the share capital, EUR 35,350.60, have been entered into the Trade
Register on 12 May 2011. The new shares were traded on the main list of the
NASDAQ OMX Helsinki Ltd together with the old shares as of 13 May 2011.
After the increase the Company's registered share capital is EUR
6,102,580.76, divided into 19,904,442 shares.
THE BOARD'S AUTHORISATIONS
Authorisation to the Board of Directors to decide on share issue
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.
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.
Donations to good causes
The Annual General Meeting granted on 30 March 2011 to the Board of Directors
an authorisation to decide on a donation of no more than EUR 150,000 to Finnish
universities either directly by the company or through its subsidiaries.
According to the decision of the Board of Directors PKC Electronics Oy donated
EUR 100,000 to the University of Oulu and EUR 50,000 to the University of Vaasa
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 130,880 2006B
warrants and 209,850 2006C warrants.
The share subscription price for the 2006 stock options is the volume-weighted
average price of the PKC Group Oyj share on NASDAQ OMX Helsinki, with dividend
adjustments, as defined in the stock option terms (at present, EUR 9.54 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 237,150. After the registration of subscription
to be made on 12 May 2011, the Company's share capital can increase by a
maximum of 342,380 shares i.e. EUR 116,409.20 as a result of the exercise of
the remaining outstanding option rights. The share subscription period is for
2006A warrants 1 April 2009 - 30 April 2011, 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 200,000 2009A and 200,000 2009B warrants.
The subscription price for shares through the exercise of the 2009 stock
options is the volume-weighted average price of the PKC Group Oyj share on
NASDAQ OMX Helsinki for April 2009, 2010 and 2011 + 20% with dividend
adjustments, (at present, EUR 2.90 for the 2009A warrants, EUR 12,71 for the
2009B warrants and EUR 18.58 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.
BUSINESS COMBINATIONS
PKC Group announced on 28 February, 2011 that it had signed an agreement to
purchase 100% of the shares in SEGU companies. Under the share purchase
agreement, PKC Group's subsidiaries shall purchase all shares in SEGU
Systemelektrik GmbH (Germany), SEGU Polska Sp. z o.o. (Poland) and TZOV HBM
Kabel Corp (Ukraine). The closing of the acquisition was subject to fulfillment
of customary terms including Ukrainian competition authority approval. The
requirements of closing have been fulfilled and PKC gained control of the
acquired companies on April 30, 2011, which is also the day of consolidation.
SEGU companies and PKC's Polish unit will form a business unit servicing the
Central European markets with annual sales of about hundred million and about
2,500 employees. In addition to access to interesting new OEMs, the acquisition
of SEGU companies will bring a strategically important footprint in Germany as
well as benefit of scale and increased credibility for PKC.
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.
Due to the global growth in industrial production, the prices and availability
of raw materials and components may develop in an unfavourable direction. This
might increase PKC's processing and freight costs during this year.
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.
The principles, objectives and organisation of the company's risk management as
well as key risk areas are described in the risk management section of the
Corporate Governance guidelines, which are available on the company's website
at www.pkcgroup.com.
OUTLOOK FOR THE FUTURE
During the first half of the year, the customers of PKC's Wiring Harnesses
segment received more new orders than the average level the previous year.
PKC expects that net sales of the Wiring Harnesses business will grow in
comparison with the previous year.
During the first half of the year, sales of customers of the Electronics
segment increased over the average level of the previous year. PKC expects that
the net sales of the Electronics business will grow in comparison with the
previous year.
PKC expects that its net sales and comparable operating profit in 2011 will be
greater than the level in 2010. Net sales in 2010 amounted to EUR 316.1 million
and operating profit without non-recurring items was EUR 31.5 million.
FINANCIAL REPORTS IN 2011
In 2011, the Interim Reports will be published as follows:
Interim Report 1-9/2011 on Thursday 3 November 2011 at 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 2010, unless otherwise mentioned. The figures presented
in the tables are independently rounded figures.
TABLES
The quarterly 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 2010. The year 2011 IFRS standard changes have
not had any effect.
CONSOLIDATED STATEMENT OF 4-6/11 4-6/10 1-6/11 1-6/10 1-12/10
COMPREHENSIVE INCOME (EUR 1,000) 3 mon. 3 mon. 6 mon. 6 mon. 12 mon.
NET SALES 109,307 81,005 206,193 141,839 316,081
Other operating income 1,755 1,070 2,413 1,626 4,597
Increase (+) / decrease (-) in -558 566 1,107 249 5,983
stocks of finished goods and work
in progress
Production for own use 74 0 74 0 0
Materials and services 67,459 48,205 127,679 83,092 190,940
Employee benefit expenses 21,649 16,676 40,374 31,144 66,442
Depreciation 3,243 2,692 6,056 5,459 10,684
Other operating expenses 11,153 7,480 18,933 13,604 28,906
OPERATING PROFIT 7,074 7,588 16,745 10,415 29,689
Interest expenses -591 -335 -1,129 -819 -1,964
Other financial income 1,213 19 1,460 42 132
Other financial expenses 0 -2,599 0 -4,612 -2,829
PROFIT BEFORE TAXES 7,696 4,674 17,076 5,025 25,029
Income tax -1,434 -482 -3,222 -587 -5,346
PROFIT FOR THE REPORT PERIOD 6,262 4,192 13,854 4,438 19,683
Other comprehensive income:
Foreign currency translation -590 4,232 -3,329 11,830 10,499
differences - foreign operations
Total comprehensive income for the 5,672 8,424 10,525 16,268 30,182
period
Attributable to equity holders of
the parent company:
Basic earnings per share (EPS), 0.32 0.24 0.70 0.25 1.09
EUR
Diluted earnings per share (EPS), 0.31 0.24 0.69 0.25 1.09
EUR
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 6/11 6/10 12/10
1,000)
ASSETS
NON-CURRENT ASSETS
Goodwill 15,384 15,159 15,662
Other intangible assets 10,650 10,579 9,196
Property, plant and equipment 48,091 35,115 36,232
Assets held for sale 387 0 0
Deferred tax assets 4,895 5,166 4,794
Other receivables 31 55 38
Total non-current assets 79,438 66,074 65,923
CURRENT ASSETS
Inventories 71,083 44,461 58,127
Receivables
Trade receivables 55,766 54,667 45,797
Other receivables 12,334 11,870 12,005
Total receivables 68,100 66,537 57,803
Cash and cash equivalents 15,056 7,641 37,104
Total current assets 154,240 118,639 153,034
Total assets 233,677 184,713 218,956
EQUITY AND LIABILITIES
EQUITY
Share capital 6,103 5,983 5,983
Share premium account 8,246 4,862 4,850
Invested non-restricted equity fund 21,852 368 21,852
Translation reserve 733 1,074 958
Share-based payments 1,993 1,312 1,663
Retained earnings 74,179 70,003 68,789
Profit for the report period 13,854 4,438 19,683
Total equity 126,960 88,039 123,776
LIABILITIES
Non-current liabilities
Interest-bearing liabilities 25,228 30,146 26,097
Non-interest-bearing liabilities
Provisions 1,037 420 472
Deferred tax liabilities 6,762 2,202 4,804
Total non-current liabilities 33,026 32,768 31,373
Current liabilities
Interest-bearing liabilities 8,556 14,580 8,939
Trade payables 37,306 28,433 33,291
Other non-interest-bearing liabilities 27,830 20,893 21,577
Total current liabilities 73,692 63,905 63,807
Total liabilities 106,718 96,673 95,180
TOTAL EQUITY AND LIABILITIES 233,677 184,713 218,956
CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1-6/11 6 1-6/10 6 1-12/10 12
1,000) mon. mon. mon.
Cash flows from operating activities
Cash receipts from customers 220,549 123,285 305,662
Cash receipts from other operating activities 2,224 1,212 4,625
Cash paid to suppliers and employees -212,053 -122,802 -284,392
Cash flows from operations before financial 10,719 1,695 25,895
income and expenses and taxes
Interest paid -1,164 -736 -1,915
Translation difference 994 1,139 857
Interest received and other financial income 713 -136 342
Income taxes paid -2,469 -2,468 -2,244
Net cash from operating activities (A) 8,794 -506 22,935
Cash flows from investing activities
Acquisition of property and equipment and -5,674 -3,260 -8,542
intangible assets
Proceeds from sale of property and equipment 293 615 466
and intangible assets
Acquisitions of subsidiaries -12,552 0 0
Loans granted 0 -1 -1
Proceeds from repayments of loans 16 1 17
Net cash used in investment activities (B) -17,917 -2,644 -8,060
Cash flows after investments -9,123 -3,150 14,875
Cash flows from financing activities
Drawing of credits and use of financing and 0 6,101 0
credit facilities
Share issue 3,500 0 21,708
Repayment of short-term/long-term borrowings -5,355 -4,963 -8,697
Dividends paid -10,891 -7,113 -7,113
Net cash used in financing activities (C) -12,746 -5,975 5,898
Net increase (+) or decrease (-) in cash and -21,868 -9,125 20,774
equivalents (A+B+C)
Cash and cash equivalents in the beginning of 37,104 15,378 15,326
the period
Effect of exchange rate fluctuations -179 1,388 1004
Cash and cash equivalents in the end of the 15,056 7,641 37,104
period
KEY FINANCIAL INDICATORS 1-6/11 6 1-6/10 6 1-12/10 12
mon. mon. mon.
Net sales, EUR 1,000 206,193 141,839 316,081
Operating profit, EUR 1,000 16,745 10,415 29,689
% of net sales 8.1 7.3 9.4
Profit before taxes, EUR 1,000 17,076 5,025 25,029
% of net sales 8.3 3.5 7.9
Net profit for the period, EUR 1,000 13,854 4,438 19,683
% of net sales 6.7 3.1 6.2
Return on equity (ROE), % 22.1 10.7 19.4
Return on investments (ROI), % 27.7 23.8 25.8
Net liabilities, EUR 1,000 18,727 37,085 -2,068
Gearing, % 14.8 42.1 -1.7
Equity ratio, % 54.3 47.7 56.5
Current ratio 2.1 1.9 2.4
Gross capital expenditure, EUR 1,000 19,493 3,335 8,575
% of net sales 9.5 2.4 2.7
R&D expenditures, EUR 1,000 3,196 2,826 5,692
% of net sales 1.6 2.0 1.8
Personnel average 6,513 4,568 5,039
PER-SHARE KEY INDICATORS 1-6/11 6 1-6/10 6 1-12/10 12
mon. mon. mon.
Earnings per share (EPS), EUR 0.70 0.25 1.09
Earnings per share (EPS),diluted, EUR 0.69 0.25 1.09
Equity per share, EUR 6.38 4.95 6.33
Share price at close of period, EUR 15.78 10.87 15.40
Lowest share price, EUR 13.90 6.55 6.55
Highest share price, EUR 18.36 11.90 15.58
Average share price, EUR 15.59 9.69 10.72
Turnover in shares, 1,000 shares 5,403 6,712 10,173
Turnover in shares per (share issue 27.4 37.7 56.5
adjusted) share capital, %
Average number of shares, 1,000 shares 19,725 17,782 17,990
Average number of shares, diluted, 1,000 20,104 17,816 18,054
shares
Shares at end of period, 1,000 shares 19,904 17,782 19,552
Market capitalisation, EUR 1,000 314,092 193,285 301,100
1. SEGMENT INFORMATION
1.1.-30.6.2011 (EUR 1,000) Wiring Electro Unallocated amounts Group
Harness nics and eliminations Total
Sales to external customers 168,333 37,860 0 206,193
Sales to other segments 419 59 -478 0
Net sales, EUR 1,000 168,752 37,920 -478 206,193
Operating profit before 19,756 986 -1,810 18,932
non-recurring items
% of net sales 11.7 2.6 0 9.2
Donations to the 0 150 0 150
universities
Advisor fees 410 0 1,994 2,354
Cancellation of the -317 0 0 -317
write-down of inventories
Total non-recurring other 93 150 1,994 2,187
operating items
Operating profit 19,663 836 -3,754 16,745
% of net sales 11.7 2.2 0 8.1
Segment's assets 193,376 50,026 4,858 248,260
Unallocated assets *) 0 0 -14,583 -14,583
Total assets 193,376 50,026 -9,725 233,677
*) Segment's assets do not include deferred taxes
1.1.-30.6.2010 (EUR 1,000) Wiring Electro Unallocated amounts Group
Harness nics and eliminations Total
Sales to external customers 109,807 32,032 0 141,839
Sales to other segments 956 133 -1,089 0
Net sales, EUR 1,000 110,763 32,165 -1,089 141,839
Operating profit before 9,617 2,404 -960 11,061
non-recurring expenses
% of net sales 8.7 7.5 0 7.8
Non-recurring employee 646 0 0 646
benefit expenses
Operating profit 8,971 2,404 -960 10,415
% of net sales 8.2 7.5 0 7.3
Segment's assets 123,840 46,710 8,998 179,548
Unallocated assets *) 0 0 5,166 5,166
Total assets 123,840 46,710 14,164 184,714
*) Segment's assets do not include deferred taxes
1.1.-31.12.2010 (EUR 1,000) Wiring Electro Unallocated amounts Group
Harness nics and eliminations Total
Sales to external customers 242,384 73,697 0 316,081
Sales to other segments 411 243 -654 0
Net sales, EUR 1,000 242,795 73,940 -654 316,081
Operating profit before 26,260 7,691 -2,452 31,499
non-recurring expenses
% of net sales 10.8 10.4 0 10.0
Non-recurring employee 1,363 0 0 1,363
benefit expenses
Non-recurring other 447 0 0 447
operating expenses
Total non-recurring expenses 1,810 0 0 1,810
Operating profit 24,450 7,691 -2,452 29,689
% of net sales 10.1 10.4 0 9.4
Segment's assets 151,634 52,348 10,181 214,162
Unallocated assets *) 0 0 4,794 4,794
Total assets 151,634 52,348 14,975 218,956
*) Segment's assets do not include deferred taxes
NET SALES BY GEOGRAPHICAL 4-6/11 3 4-6/10 3 1-6/11 6 1-6/10 6 1-12/10
LOCATIONS (EUR 1,000) mon. mon. mon. mon. 12 mon.
Finland 16,521 13,169 32,107 23,988 53,720
Other Europe 62,790 38,380 117,615 67,719 154,588
North America 6,913 5,889 13,283 10,804 20,732
South America 17,329 14,735 33,111 26,590 56,958
Other countries 5,755 8,831 10,078 12,738 30,083
Total 109,307 81,005 206,193 141,839 316,081
2. CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY (EUR MILLION)
A = Share Capital
B = Share premium account
C = Invested non-restricted equity fund
D = Translation difference
E = Retained earnings
F = Total equity
A B C D E F
Equity at 1.1.2010 6.0 4.9 0.4 -2.9 70.3 78.6
Dividends 0.0 0.0 0.0 0.0 -7.1 -7.1
Share-based payments 0.0 0.0 0.0 0.0 0.3 0.3
Comprehensive income for the period 0.0 0.0 0.0 11.8 4.3 16.1
Equity at 30.6.2010 6.0 4.9 0.4 8.9 67.8 88.0
Equity at 1.1.2011 6.0 4.9 21.8 7.6 83.5 123.7
Dividends 0.0 0.0 0.0 0.0 -10.7 -10.7
Share-based payments 0.0 0.0 0.0 0.0 0.3 0.3
Subscription of shares 0.1 3.4 0.0 0.0 0.0 3.5
Comprehensive income for the period 0.0 0.0 0.0 -3.3 13.8 10.5
Other changes 0.0 0.0 0.0 -0.5 0.0 -0.5
Equity 30.6.2011 6.1 8.3 21.8 3.8 86.9 126.9
3. BUSINESS COMBINATIONS
PKC Group signed on 28 February 2011 an agreement for the purchase of shares in
the Segu companies. The ownership and control have been transferred to PKC
Group on 30 April 2011, which is also the date of consolidation.
The acquisition cost is calculated on the basis of the Segu companies'
preliminary balance sheet as per 30 April 2010 prepared, essentially, in
accordance with IFRS and the PKC Group's accounting principles.
The preliminary goodwill of EUR 0.1 million arising from the acquisition is
mainly attributable to the acquired workforce and economies of scale and
synergies expected from combining the operations of Segu and PKC Group. None of
the goodwill recognized for the Segu companies is tax deductible.
The following table summarizes the consideration paid for Segu companies and
the amounts of the assets acquired and liabilities assumed recognized at the
acquisition date. The below mentioned acquisition consideration and the fair
values at 30 June 2011 are preliminary as the finalisation of the acquisition
cost calculation is still ongoing.
Consideration at 30 April 2011 (EUR million)
Cash 13.7
Total consideration transferred 13.7
The assets and liabilities arising from the acquisition are as follows
(EUR million)
Property, plant and equipment 11.6
Intangible assets 2.8
Inventories 8.0
Trade and other receivables 6.1
Cash and cash equivalents 0.5
Non-current assets held for sale 0.4
Total assets 29.4
Provisions 0.2
Retirement benifit obligation 0.3
Interest-bearing liabilities 5.7
Trade and other liabilities 8.8
Deferred tax liabilities 0.8
Total liabilities 15.8
Total identifiable net assets 13.6
Goodwill 0.1
The fair value of the acquired identifiable intangible assets of EUR 2.8
million (including customer relationships and software) is preliminary pending
receipt of the final valuations for those assets.
The fair value of current trade receivables and other receivables is EUR 6.1
million and includes trade receivables with a fair value of EUR 2.7 million.
The fair value of trade receivables does not include any significant risk.
A building in Germany has been presented as a non-current asset held for sale
as agreed in pursuance of the Segu acquisition. The sale is expected to be
completed by 30 September 2011.
The total acquisition-related costs are estimated to approximate EUR 0.8
million. Acquisition-related cost included in other operating expenses in the
consolidated statement of comprehensive income amount to EUR 0.4 million for
the year ended 31 December 2010 and EUR 0.4 million for the 6 months ended 30
June 2011.
The net sales included in the consolidated statement of comprehensive income
since 30 April 2011 contributed by Segu companies was EUR 7.9 million. Segu
companies also contributed profit of EUR 0.4 million over the same period.
Had the Segu companies been consolidated from 1 January 2011, the consolidated
statement of comprehensive income would show net sales of EUR 220.7 million and
profit of EUR 14.5 million.
4. PROPERTY, PLANT AND EQUIPMENT (EUR 1,000) 6/11 6/10
Acquisition cost 1.1. 76,969 73,772
+/- Translation difference 1.1. -458 1,033
+ Additions 5,091 2,969
+ Acquisitions 15,738 0
- Disposals -689 -1,340
Acquisition cost 30.6. 96,651 76,434
Accumulated depreciation 1.1. 40,737 39,395
+/- Translation difference 1.1. -232 -574
- Accumulated depreciation on disposals 3,409 -1,106
+ Depreciation 4,257 3,604
Depreciation 30.6. 48,171 41,319
Carrying amount 30.6. 48,478 35,115
5. OTHER INTANGIBLE ASSETS (EUR 1,000) 6/11 6/10
Acquisition cost 1.1. 39,636 37,167
+/- Translation difference 1.1. -390 1,175
+ Additions 551 367
+ Acquisitions 2,918 0
- Disposals 0 -133
Acquisition cost 30.6. 42,715 38,576
Accumulated depreciation 1.1. 13,516 11,418
+/- Translation difference 1.1. 1,247 -216
- Accumulated depreciation on disposals 119 -132
+ Depreciation 1,799 1,766
Depreciation 30.6. 16,681 12,837
Carrying amount 30.6. 26,034 25,739
6. CONTINGENT LIABILITIES AT END OF PERIOD (EUR 1,000) 6/11 6/10 12/10
Leasing liabilities 2,712 3,226 2,982
Liabilities for derivative instruments
Nominal values
Currency derivatives
Forward contracts 347 405 0
Copper derivatives
Forward contracts 2,524 1,548 2,010
Total 2,872 1,953 2,010
Fair values
Currency derivatives
Forward contracts 0 3 0
Copper derivatives
Forward contracts 11 0 307
Total 12 3 307
Currency and copper derivatives are used only in hedging currency and copper
risks. PKC Group does not apply hedge accounting to derivate instruments in
accordance with IAS 39. Fair values of the derivatives are entered directly in
the income statement.
7. QUARTERLY KEY 1-3/10 3 4-6/10 3 7-9/10 3 10-12/10 1-3/11 3 4-6/11
INDICATORS, mon. mon. mon. 3 mon. mon. 3 mon.
CONSOLIDATED
Net sales, EUR 60.8 81.0 82.3 91.9 96.9 109.3
million
Operating profit, EUR 2.8 7.6 9.5 9.8 9.7 7.1
million
% of net sales 4.6 9.4 11.5 10.6 10.0 6.5
Profit before taxes, 0.4 4.7 13.4 6.6 9.4 7.7
EUR million
% of net sales 0.6 5.8 16.2 7.2 9.7 7.0
Equity ratio, % 46.1 47.7 50.2 56.5 52.4 54.3
Earnings per share 0.01 0.24 0.56 0.29 0.38 0.31
(EPS), diluted (EUR)
Equity per share, EUR 4.47 4.95 5.15 6.33 6.09 6.38
QUARTERLY KEY
INDICATORS, WIRING
HARNESS
Net sales, EUR 45.7 64.1 61.8 70.8 78.2 90.2
million
Operating profit, EUR 2.0 7.0 6.8 8.7 10.1 9.6
million
% of net sales 4.4 10.9 11.0 12.3 12.9 10.6
QUARTERLY KEY
INDICATORS,
ELECTRONICS
Net sales, EUR 15.1 16.9 20.5 21.1 18.7 19.1
million
Operating profit, EUR 1.3 1.1 3.3 2.0 0.4 0.4
million
% of net sales 8.6 6.5 15.9 9.6 2.4 2.1
CALCULATION OF INDICATORS
Return on equity (ROE), %
= 100 x (Profit/loss) / Shareholders' equity (average)
Return on investments (ROI), %
= 100 x (Profit before taxes + financial expenses) / Shareholders' equity +
interest-bearing liabilities (average)
Gearing, %
= 100 x (Interest-bearing liabilities - cash and cash equivalents and
investments) / Shareholders' equity + non-controlling interests
Equity ratio, %
= 100 x (Shareholders' equity + non-controlling interests) / Total of statement
of financial position - advance payments received
Quick ratio
= Receivables and cash and cash equivalents / Current liabilities - advance
payments received
Current ratio
= Receivables and cash and cash equivalents + inventories / Current liabilities
Earnings per share (EPS), EUR
= Profit/loss +/- non-controlling interests / Average share issue-adjusted
number of shares
Shareholders' equity per share, EUR
= Shareholders' equity / 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 financial period x the last trading price
of the financial period
All the future estimates and forecasts presented in this stock exchange release
are based on the best current knowledge of the company's management. The
estimates and forecasts contain certain elements of risk and uncertainty which,
if they materialise, may lead to results that differ from present estimates.
The main factors of uncertainty are related, among other things, to the general
economic situation, the trend in the operating environment and the sector as
well as the success of the Group's strategy.
PKC GROUP OYJ
Board of Directors
Harri Suutari
President and CEO
For additional information, contact:
Harri Suutari, President & CEO, PKC Group Oyj, +358 400 384 937
PRESS CONFERENCE
A press conference on the interim report will be arranged for analysts and
investors today, 4 August 2011, 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
harnesses, cabling and electronics. The Group has production facilities in,
Brazil, China, Estonia, Finland, Germany, Mexico, Poland, Russia and Ukraine.
The Group's net sales in 2010 totalled EUR 316.1 million. PKC Group Oyj is
listed on NASDAQ OMX Helsinki Ltd.
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