2015-10-29 07:15:00 CET
2015-10-29 07:15:03 CET
REGULATED INFORMATION
PKC Group Oyj - Interim report (Q1 and Q3)
PKC Group Q3/2015: EBITDA remained stable
PKC Group Plc Interim Report 29 October 2015 8.15 a.m.
PKC Group Q3/2015:
EBITDA remained stable
This release is a summary of PKC Group's Interim Report January-September 2015.
The complete report is attached to this release as a pdf-file. It is also
available on the company website at www.pkcgroup.com.
July - September 2015 highlights
-- Revenue increased 7.4% on the comparison period (7-9/2014), totalling EUR
225.9 million (EUR 210.2 million). The changes in consolidation exchange
rates increased the revenue by approximately +9%.
-- EBITDA before non-recurring items increased 4.1% on the comparison period
(7-9/2014), totalling EUR 15.9 million (EUR 15.2 million) and 7.0% (7.2%)
of revenue.
-- Wiring Systems business segment's EBITDA before non-recurring items
increased 8.7% on the comparison period (7-9/2014), totalling EUR 16.9
million (EUR 15.5 million) and 7.9% (7.9%) of revenue.
-- The acquisition of Groclin Wiring & Controls business
(Kabel-Technik-Polska Sp. z o.o.) was completed and PKC's joint venture
Jiangsu Huakai-PKC Wire Harness Co., Ltd started its operations.
-- Operating profit before non-recurring items decreased 11.6% on the
comparison period (7-9/2014), totalling EUR 7.4 million (EUR 8.4 million)
and 3.3% (4.0%) of revenue. PPA related depreciation and amortization was
EUR 2.8 million (EUR 2.0 million)
-- Diluted earnings per share were EUR 0.08 (EUR -0.73) including the impact
of EUR -1.8 million non-recurring items (EUR -12.4 million non-recurring
items and EUR -8.3 additional taxes).
-- Cash flow after investments was EUR -39.9 million (EUR 0.9 million)
including acquisition cash outflow amounting to EUR 22.0 million.
PKC Group's outlook for 2015
-- PKC Group estimates that with prevailing exchange rates 2015 revenue will
be higher than previous year level, and that comparable EBITDA will be
higher than in 2014. In 2014, PKC's revenue was EUR 829.5 million and
comparable EBITDA before non-recurring items was EUR 48.6 million*. Revenue
and EBITDA estimates are based on current business structure.
Key figures* 7-9/15 7-9/14 Change 1-9/15 1-9/14 Change 1-12/14
% %
EUR 1,000 (unless otherwise noted)
Revenue 225,907 210,246 +7.4 676,287 620,269 +9.0 829,516
EBITDA** 15,867 15,241 +4.1 48,307 39,973 +20.9 48,572
% of revenue 7.0 7.2 7.1 6.4 5.9
Operating profit** 7,427 8,405 -11.6 24,694 19,826 +24.6 21,384
% of revenue 3.3 4.0 3.7 3.2 2.6
Non-recurring items -1,803 -12,423 -7,746 -16,622 -28,362
Operating profit 5,624 -4,018 16,948 3,203 +429.1 -6,978
(loss)
% of revenue 2.5 -1.9 2.5 0.5 -0.8
Profit (loss) 4,446 -4,593 13,628 633 -10,528
before taxes
Net profit (loss) 2,070 -17,560 5,042 -14,059 -29,051
for the report
period
Earnings per share 0.08 -0.73 0.21 -0.59 -1.21
(EPS), EUR
Cash flow after -39,925 927 -70,170 -10,038 20,699
investments
ROCE,% 11.2 9.2 7.7
Gearing, % 65.0 12.9 -5.6
* PKC Group has reclassified certain financial items and operating expenses as
of the beginning of 2015. Comparison periods have been adjusted accordingly.
The changes to revenue and operating profit (loss) are minor and have no impact
on the net profit (loss) for the period or shareholders' equity. The changes
are presented in detail in the table section of the interim report Q1/2015.
** before non-recurring items
Matti Hyytiäinen, President & CEO:
In North America and Europe production of heavy-duty trucks during the third
quarter grew on the comparison period but fell short of second quarter's
production volumes. However, production volumes of medium-duty trucks in North
America and in Europe declined in comparison with both the comparison period
and second quarter. In Brazil and China, production volumes of trucks were
declining and fell short of comparison period.
PKC's operating profit before non-recurring items in January-September
increased on the comparison period by 24.6% and was EUR 24.7 million. The
Wiring Systems business EBITDA continued to improve although some production
transfers in Europe have been delayed due to the customers' approval processes.
Brazil's operating loss has decreased quarter by quarter despite the fact that
the sudden significant weakening of the Brazilian real in the beginning of the
third quarter weakened the profitability while the sales prices are based on
January-June 2015 average exchange rate. Closing of Curitiba factory in Brazil
is progressing as planned and production will cease by the end of first quarter
of 2016.
In the third quarter the level of the Electronics business's operating profit
was impacted by unfavorable share of ODM products in the product mix due to a
change in a customer's product strategy.
During the period PKC's executive board was strengthened and responsibilities
were realigned to accelerate the company's growth.
The first growth projects in line with the PKC 2018 strategy were realized
during the reporting period. Expansion in Asia progressed while a Chinese joint
venture, Jiangsu Huakai-PKC Wire Harness Co., Ltd., began operations and the
company is to reach the full speed by the end of the year. Despite current
downturn in China's truck markets, wiring systems market value is growing due
to increasing complexity of trucks' electrification and higher quality
requirements. PKC has the knowhow to respond to this market change and we are
confident that new growth projects will be realized. Also the expansion to
rolling stock markets took place with the acquisition of Groclin Wiring &
Controls business including the Polish Kabel-Technik-Polska Sp. z o.o. Global
rolling stock electrical cabinet, powerpack and electrical distribution system
market is about EUR 2 billion annually. We see significant opportunities to
grow organically and through acquisitions utilizing KTP's good customer
relations to the world's leading rolling stock manufacturers.
In North America, the full-year production volume forecasts for trucks remain
unchanged. In Europe, full-year production volumes are expected to be somewhat
higher than the previous estimate, due to a slight increase in heavy-duty truck
production volumes. In Brazil and China production forecasts have been reduced
further.
Market outlook
Wiring Systems Business
In 2015 the production of heavy-duty and medium-duty trucks in Europe is
expected to grow by about 10% compared to previous year's level.
In 2015 the production of heavy-duty and medium-duty trucks in North America is
expected to increase by about 6%, and production of light vehicles to increase
by about 6% compared to 2014.
In 2015 the production of heavy-duty and medium-duty trucks in Brazil is
expected to be clearly lower than previous year. The economic and political
uncertainty in Brazil bear a significant risk for Brazilian truck sales to
further drop in 2015.
Electronics Business
The market demand for Electronics segment's products is expected to remain on
the current level at the most.
PKC Group Plc
Board of Directors
Matti Hyytiäinen
President & CEO
For additional information, contact:
Matti Hyytiäinen, President & CEO, PKC Group Plc, tel. +358 (0)400 710 968
Juha Torniainen, CFO, PKC Group Plc, tel. +358 (0)40 570 8871
Press conference
A press conference on the interim report will be arranged for analysts and
investors today, 29 October 2015, at 10.00 a.m., at the address Event Arena
Bank, Unioninkatu 20, Helsinki.
Attachment
PKC interim report Q3 2015
Distribution
Nasdaq Helsinki
Main media
www.pkcgroup.com
PKC Group is a global partner, designing, manufacturing and integrating
electrical distribution systems, electronics and related architecture
components for the commercial vehicle industry, rolling stock manufacturers and
other selected segments. The Group has production facilities in Brazil, China,
Estonia, Finland, Germany, Lithuania, Mexico, Poland, Russia, Serbia and the
USA. The Group's revenue in 2014 totalled EUR 829.5 million. PKC Group Plc is
listed on Nasdaq Helsinki.
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