PKC Group Oyj - Financial Statement Release

PKC Group Q4/2014: Strong cash flow, lower comparable EBITDA and revenue

PKC Group Plc       Financial statement release   12 February 2015  8.15 a.m.



PKC Group Q4/2014:

Strong cash flow, lower comparable EBITDA and revenue



October - December 2014 highlights

  -- Revenue decreased 1.7% on the comparison period (10-12/2013), totalling EUR
     208.5 million (EUR 212.1 million).
  -- EBITDA before non-recurring items was EUR 9.1 million (EUR 13.9 million)
     and 4.4% (6.6%) of revenue.
  -- EBITA** was EUR 4.2 million (EUR 9.8 million) and 2.0% (4.6%) of revenue.
     During the report period PPA depreciation and amortisation totalled EUR 2.1
     million (EUR 3.2 million).
  -- Operating profit before non-recurring items was EUR 2.1 million (EUR 6.7
     million) and 1.0% (3.1%) of revenue.
  -- Earnings per share were EUR -0.63 including the impact of EUR -11.7 million
     non-recurring items in operating profit (EUR 0.08).
  -- Cash flow after investments was EUR 30.7 million (EUR 18.5 million)



January - December 2014 highlights

  -- Revenue decreased 6.2% on the comparison period (1-12/2013), totalling EUR
     829.2 million (EUR 884.0 million).
  -- EBITDA before non-recurring items was EUR 48.9 million (EUR 70.3 million)
     and 5.9% (8.0%) of revenue.
  -- EBITA** was EUR 29.8 million (EUR 52.5 million) and 3.6% (5.9%) of revenue.
     During the financial year PPA depreciation and amortisation totalled EUR
     8.2 million (EUR 11.6 million).
  -- Operating profit before non-recurring items was EUR 21.7 million (EUR 40.9
     million) and 2.6% (4.6%) of revenue.
  -- Earnings per share were EUR -1.21 including the impact of EUR -28.4 million
     non-recurring items in operating profit and of EUR 8.3 million additional
     taxes (EUR 0.63).
  -- Cash flow after investments was EUR 20.7 million (EUR 24.9 million).
  -- Dividend proposal is EUR 0.70 per share (EUR 0.70 per share). 



PKC Group's outlook for 2015

  -- PKC Group estimates that with prevailing exchange rates 2015 revenue will
     be close to previous year level, and that comparable EBITDA will be higher
     than in 2014. In 2014, PKC's revenue was EUR 829.2 million and comparable
     EBITDA before non-recurring items was EUR 48.9 million. Revenue and EBITDA
     estimates are based on current business structure.





Key figures                   10-12/1  10-12/1  Change  1-12/14  1-12/13  Change
                                    4        3       %                         %
EUR 1,000 (unless otherwise noted)                                              
Revenue                       208,532  212,109    -1.7  829,219  883,986    -6.2
EBITDA*                         9,137   13,946   -34.5   48,865   70,341   -30.5
% of revenue                      4.4      6.6              5.9      8.0        
EBITA**                         4,189    9,813   -57.3   29,833   52,461   -43.1
% of revenue                      2.0      4.6              3.6      5.9        
Operating profit*               2,095    6,661   -68.5   21,677   40,873   -47.0
% of revenue                      1.0      3.1              2.6      4.6        
Non-recurring items           -11,739   -2,061   469.5  -28,362  -10,409   172.5
Operating profit(loss)         -9,644    4,599  -309.7   -6,685   30,463  -121.9
% of revenue                     -4.6      2.2             -0.8      3.4        
Profit(loss) before taxes     -11,160    1,942  -674.7  -10,528   21,562  -148.8
Net profit (loss) for the     -14,992    1,783  -941.0  -29,051   13,947  -308.3
 report period                                                                  
Earnings per share (EPS),       -0.63     0.08  -882.3    -1.21     0.63  -293.7
 EUR                                                                            
Cash flow after investments    30,737   18,513    66.0   20,699   24,941   -17.0
ROI,%                                                       5.3     14.7        
Gearing, %                                                 -5.6     -1.1        
Average number of personnel    20,165   18,946     6.4   19,640   19,206     2.3
* before non-recurring items                    
** operating profit before PPA depreciation and amortisation and non-recurring  
 items                                                                          





Matti Hyytiäinen, President & CEO:



PKC's revenue was EUR 829.2 million. PKC's market position remained strong in
all central product and geographical operating areas throughout the financial
year. The number of trucks manufactured in Europe and Brazil fell short of the
level of the previous year. Due to decreased production volumes, our revenue in
Europe and Brazil fell. In North America, the production volumes of trucks
exceeded the volumes of the previous year. Despite the positive truck market,
PKC's revenue in North America remained at the level of the previous year, as
revenue was decreased by some product programmes of light vehicles and
components reaching the end of their lifecycle. The revenue for PKC's
Electronics segment decreased in comparison to the previous year due to
weakened demand in the EMS product area. 



PKC's operating profit before non-recurring items was EUR 21.7 million. The
operating profit was unsatisfactory as a result of significant losses sustained
in Brazil. Furthermore, investment in implementing strategy added the company's
expenses in the financial year. 



Cash flows from operations was at the level of previous financial year,
totalling EUR 41.0 million. The company is free of net liabilities, with
gearing at -5.6%. 



I want to warmly thank all PKC employees for the fact that once again we have
succeeded in serving our customers in an excellent fashion. Several
recognitions we have received during the financial year are a token of this. 



In 2015, we expect the market environment to be fluctuating. The production of
trucks in North America is forecast to grow from the level of 2014. On the
other hand, we forecast the production of trucks in Europe to remain at the
level of the previous year at most and the production in Brazil to decrease
from the level of previous year. The demand for the products of PKC's
electronics segment is estimated to remain at the current level. 



Market outlook



Wiring Systems Business



In 2015 the production of heavy-duty and medium-duty trucks in Europe is
expected to remain on previous year's level at the most. 



Production of heavy-duty trucks in North America is expected to increase by
about 14%, production of medium-duty trucks to decline by about 3% and
production of light vehicles to increase by about 1% compared to 2014. 



In 2015 the production of heavy-duty and medium-duty trucks in Brazil is
expected to be lower than previous year. The governmental incentive program to
support the purchase of new trucks continues to be valid until further notice,
although the terms have been weakened significantly. The weakened terms and
both economic and political uncertainty in Brazil bear a considerable risk for
Brazilian truck sales for 2015. 



Electronics Business



The market demand for Electronics segment's products is expected to remain at
the current level. 



Disclosing procedures of financial reviews



PKC Group Plc follows the disclosure procedure enabled by Standard 5.2b
published by the Finnish Financial Supervision Authority, and discloses
relevant information related to its Interim Report with this release. PKC's
financial statement release for January - December 2014 is attached to this
release and is also available on company's website at www.pkcgroup.com. 



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 financial statement will be arranged for analysts and
investors today, 12 February 2015, at 10.00 a.m., at the address Event Arena
Bank, Unioninkatu 20, Helsinki. 



Attachment

PKC financial statement release 2014



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 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 829.2 million. PKC Group Plc is listed on Nasdaq Helsinki.

Attachments:

PKC financial statement release 2014.pdf