PKC Group Oyj - Company Announcement

PKC Group adjusts its North American organization and production capacity to medium term demand outlook

PKC Group Plc     Company announcement    10 August 2016    8.05 am



PKC Group adjusts its North American organization and production capacity to
medium term demand outlook 



It is estimated that North American truck production volumes continue to
decrease and to be on a lower level for the medium term. The production decline
is focusing on heavy-duty trucks, while the production of medium duty trucks is
estimated to continue on the current level. 



Low fuel prices and interest rates have not accelerated truck sales as expected
in the USA. Stagnant freight demand, increased supply of competitively priced
second hand trucks and reduced need to replace fleets have decreased new truck
sales. In addition, sales channel inventory levels are significantly above the
historic ten year average. Therefore, the production volumes have also started
to decrease. According to LMC estimates, taking into account economic outlook
for the coming years, truck production volumes will stay on a lower level for
the medium term. 



PKC has decided to reduce production capacity and to cut fixed cost in its
North American operations. The personnel reductions will be maximum 1,000
persons and they will be implemented fully by the end of the year 2016.
Currently PKC employs about 11,400 persons in North America. The related
non-recurring items will amount EUR 4.5 million and the estimated annual cost
reduction is EUR 9 million for 2017 onwards. 





PKC Group Plc



Board of Directors



Matti Hyytiäinen

President & CEO



For additional information, contact:

Matti Hyytiäinen, President & CEO, PKC Group Plc, +358 400 710 968







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 from continuing operations in 2015 totalled EUR 847
million. PKC Group Plc is listed on Nasdaq Helsinki.