2008-10-21 07:19:16 CEST
2008-10-21 07:20:09 CEST
REGULATED INFORMATION
PKC Group Oyj - Interim report (Q1 and Q3)
THE PKC GROUP'S INTERIM REPORT JANUARY-SEPTEMBER 2008
PKC Group Oyj INTERIM REPORT 21 OCTOBER 2008 8.15 a.m. THE PKC GROUP'S INTERIM REPORT JANUARY-SEPTEMBER 2008 The PKC Group's net sales in the first nine months of the year increased by 17.3% on the previous year to EUR 247.0 million (210.6 million in Jan.-Sep. 2007). Operating profit was EUR 25.0 million (21.4 million) and profit before taxes was EUR 22.7 million (20.0 million). Earnings per share were EUR 0.84 (0.79). HARRI SUUTARI, PRESIDENT AND CEO: “After continuing for a long period of time, growth in our customer sectors has stopped and demand has taken a downturn. Production volumes in the third quarter were lower than in the first half of the year but remained historically high. We are maintaining our full year forecast, despite the expectation that production volumes will decrease and adaptation measures will be implemented during the final quarter. The weakened world economy is speeding up structural developments in our customer sectors, creating new opportunities for the long-term development of our business operations. The PKC Group's strategic position will strengthen considerably by the business acquisition and long-term delivery agreement with MAN Nutzfahrzeuge AG to be finalised at the turn of the year.” OPERATING ENVIRONMENT Throughout the year, order flows in our customer sectors have been significantly smaller than last year. Production volumes have, however, remained relatively high thanks to robust order backlogs. Due to the troubled financing markets, order books are believed to have weakened further and customer sectors have already reported cut-backs in their production volumes and adaptation measures. NET SALES AND FINANCIAL PERFORMANCE July-September 2008 Consolidated net sales in July-September amounted to EUR 73.4 million (66.9 million), up 9.6% on the same period a year earlier. Consolidated operating profit totalled EUR 6.0 million (7.6 million), accounting for 8.2% of net sales (11.3%). Depreciation amounted to EUR 2.1 million (1.9 million). Financial income and expenses were EUR 0.5 million negative (0.8 million negative). Profit before taxes was EUR 5.5 million (6.8 million). Profit for the report period totalled EUR 3.0 million (4.4 million). Earnings per share were EUR 0.17 (0.25). Net sales generated in the report period by the Wiring Harnesses business amounted to EUR 57.0 million (50.2 million), or 13.5% more than in the comparative period. The segment's share of consolidated net sales was 77.6% (74.9%). It generated an operating profit of EUR 3.9 million (3.3 million), equivalent to 6.8% of the segment's net sales (6.6%). Net sales generated by the Electronics business decreased 2,1% to EUR 16.4 million (16.8 million). The segment's share of consolidated net sales was 22.4% (25.1%). It generated an operating profit of EUR 2.1 million (4.2 million), equivalent to 13.1% of the segment's net sales (25.3%). January-September 2008 Consolidated net sales in January-September amounted to EUR 247.0 million (210.6 million), up 17.3% on the same period a year earlier. Consolidated operating profit totalled EUR 25.0 million (21.4 million), accounting for 10.1% of net sales (10.1%). Depreciation amounted to EUR 6.1 million (5.6 million). Financial income and expenses were EUR 2.3 million negative (1.4 million negative). Profit before taxes was EUR 22.7 million (20.0 million). Profit for the report period totalled EUR 15.0 million (14.2 million). Earnings per share were EUR 0.84 (0.79). Net sales generated in the report period by the Wiring Harnesses business amounted to EUR 195.7 million (168.0 million), or 16.5% more than in the comparative period. The segment's share of consolidated net sales was 79.2% (79.8%). It generated an operating profit of EUR 16.0 million (13.8 million), equivalent to 8.2% of the segment's net sales (8.2%). Net sales generated by the Electronics business grew 20,7% to EUR 51.3 million (42.5 million). The segment's share of consolidated net sales was 20.8% (20.2%). It generated an operating profit of EUR 9.0 million (7.5 million), equivalent to 17.6% of the segment's net sales (17.8%). The programme for rationalising and improving the efficiency of operations, which was started during the second quarter, was continued. The reorganisation of the North American businesses was completed during the third quarter. The operations launched in China in 2005 and the businesses acquired in North America in 2006 continued to be loss-making, despite the started corrective actions. Due to the weakening of the Chinese, Brazilian and Russian currencies since the start of the year, a total of EUR 1.2 million of remeasurement losses were recorder in the third quarter as translation differences form non-monetary items, the cumulative translation difference being EUR 0.6 million negative. BALANCE SHEET AND FINANCING Consolidated total assets at 30 September 2008 stood at EUR 180.6 million (169.4 million). Interest-bearing liabilities totalled EUR 49.2 million at the close of the report period (54.0 million). The Group's equity ratio was 50.0% (47.0%). Net liabilities totalled EUR 33.9 million (46.0 million) and gearing was 37.6% (57.8%). Working capital of operations was EUR 68.9 million (71.5 million) Inventories amounted to EUR 48.0 million (41.5 million). Current receivables totalled EUR 69.1 million (74.3 million). Cash flows after investing activities during the report period were EUR 20.2 million positive (1.1 million negative). Cash in hand and at bank amounted to EUR 15.3 million (7.9 million). In order to ensure financing flexibility, PKC has available credit facilities. CAPITAL EXPENDITURES During the report period, the Group's gross capital expenditures totalled EUR 5.2 million (6.5 million), representing 2.1% of net sales (3.1%). Capital expenditures consisted mostly of the acquisition of production machinery and equipment. RESEARCH AND DEVELOPMENT Research and development expenditure totalled EUR 4.4 million (3.9 million), representing 1.8% (1.8%) of consolidated net sales. At the end of the report period, 109 (79) people were employed in product development. PERSONNEL During the report period, the Group had an average payroll of 5,636 employees (4,876). At the end of the report period, the Group's personnel numbered 5,573 employees (5,073), of whom 4,812 (3,435) worked abroad and 759 (728) in Finland. QUALITY AND THE ENVIRONMENT The application process for new certificates for the Group's Wiring Harnsesses business has been finalised. Currently, the Group's Wiring Harnesses business operations at the Haapsalu, Keila, Kempele, Kostomuksha, Nogales, Pskov and Suzhou production units have been certified in accordance with the ISO/TS 16949 and ISO 9001 standards as well as the ISO 14001 standard. The Curitiba production unit is certified under the ISO/TS 16949 and ISO 14001 standards. The Nogales production unit is certified in accordance with the ISO/TS 16949 and ISO 9001 standards. In Curitiba there's also an ongoing certification process for the work safety and health system under the OHSAS 18001 standard, which process is expected to be finalised during this year The Group's Electronics business operations at the Kostomuksha and Raahe production units have been certified in accordance with the ISO 9001 and ISO 14001 standards. At the Electronics business's Suzhou production unit, the ISO 9001 and ISO 14001 certification processes are expected to be completed during the final quarter. The Group's Electronics business will also begin preparations for certification in accordance with the ISO/TS 16949 standard. The implementation of the best quality practices in the Group's Wiring Harnesses business proceeds in every unit. Best practices support continuous development by including the personnel more deeply in the day-to-day quality development work. The progress is monitored actively in the Group's Executive Board. ANNUAL GENERAL MEETING The Annual General Meeting on 27 March 2008 passed a resolution to pay a dividend of EUR 0.45 per share, or a total of about EUR 8.0 million. The dividend was paid out on 8 April 2008. The Annual General Meeting re-elected the following persons to seats on the Board of Directors: Matti Eestilä, Jaakko Niemelä, Endel Palla, Olli Pohjanvirta, Matti Ruotsala, Harri Suutari and Jyrki Tähtinen. At its organisation meeting, the Board of Directors elected Harri Suutari Chairman and Jyrki Tähtinen Vice Chairman. After the appointment of Harri Suutari as the new President and CEO as from 3 April 2008, Suutari resigned from the Board. The Board elected Matti Ruotsala as its new Chairman. The authorized public accountant firm Ernst & Young Oy will continue as the company's auditor, with Rauno Sipilä, Authorised Public Accountant, acting as the principal auditor. SHARE TURNOVER AND SHAREHOLDERS PKC Group Oyj's share turnover on NASDAQ OMX Helsinki from 1 January to 30 September 2008 was 9,460,643 shares (13,640,965 shares), representing 53.2% of the average number of shares (76.7%). Shares were traded to a total value of EUR 71.8 million (145.6 million). The low during the report period was EUR 6.57 (9.17) and the high was EUR 9.48 (12.40). The closing price on the last trading day of the report period was EUR 6.60 (10.65) and the average price during the period was EUR 7.59 (10.69). The company's market capitalisation at the close of the period was EUR 117.4 million (189.4 million). Shares held by Board members, their related persons and corporations in which they have a controlling interest accounted for 2.3% (2.9%) of the total number of shares at the end of the report period. PKC Group Oyj had a total of 7,401 shareholders (6,436) at the end of the report period. The proportion of shares held by foreigners and by way of nominee registrations at 30 September 2008 was 24.4% of the shares outstanding (28.0%). SHARE CAPITAL The Board of Directors has been granted authorisation by the Annual General Meeting on 29 March 2007 to decide on one or more share issues and the granting of special rights as defined in Chapter 10, Section 1 of the Companies Act and on all the terms and conditions thereof. A maximum total of 3,500,000 shares may be issued or subscribed for on the basis of the authorisation. The authorisation includes the right to decide on a directed share issue. The authorisation shall remain in force for five years from the date of the resolution of the Annual General Meeting. The authorisation may be used at the Board's discretion for financing corporate acquisitions, for carrying out inter-company co-operation or similar arrangements, or for strengthening the company's financing and capital structure. The Board of Directors does not have a valid authorisation to acquire the company's own shares, and the company does not have any own shares (treasury shares) in its possession. STOCK OPTION SCHEMES In 2006, PKC launched a stock option scheme according to which the maximum total number of stock options to be issued is 697,500, and they are divided into A, B and C warrants. At the close of the report period, the key personnel had a total of 173,280 2006A warrants, 185,120 2006B warrants and 218,660 2006C warrants in their possession. The subscription period for shares through the exercise of stock options shall be during the years 2009-2013. The share subscription price for stock options shall be 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 10.64 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 234,673.67. The 2006 stock options are subject to a share ownership plan. Key personnel are obligated 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 obligated to own these shares for the duration of his managerial contract. SHORT-TERM RISKS AND UNCERTAINTIES The increased uncertainty on world markets, the continued historically high fuel prices, the fluctuations of US Dollar and Brazilian Real as well as the tightening and higher costs of financing are creating uncertainty in the future outlooks of customer sectors. The main risks are the market trend in the demand for the products of the main customers, price pressures and demands for tighter contractual terms imposed by customers, and the changes in the world market prices of raw materials and components. The principles, objectives and organisation of the company's risk management as well as key risk areas are described in the risk management section in the Corporate Governance guidelines, which are available on the company's website, www.pkcgroup.com. OUTLOOK FOR THE FUTURE The deliveries to the utility vehicle industry are expected to decline during the final part of the year. Similarly, wiring harnesses deliveries to telecommunications and industrial customers are also expected to drop during the final quarter. Electronics contract design and manufacturing services are also forecast to remain at their present level, which is lower than early in the year, for the remainder of the year. Consolidated net sales during the current year are expected to grow on the previous year. Due to declining delivery volumes, falling prices and delivery mix, profitability in the final quarter will drop below the first half. We are maintaining our full-year forecast, according to which we expect operational profitability to remain at a good level. EVENTS AFTER THE CLOSE OF THE REPORT PERIOD: PKC ACQUIRES MAN'S CABLE HARNESSES BUSINESS IN POLAND On 8 October 2008, PKC Group Oyj signed an agreement with MAN Nutzfahrzeuge AG for the acquisition of the cable harnesses business of MAN Star Trucks & Buses Spółka ZOO, which is located in Starachowice in Poland. PKC's Polish subsidiary will be responsible for the cable harnesses operations. The business employs about 1,000 people and its net sales in 2007 amounted to about EUR 70 million. The acquisition will bring a significant addition to PKC's customer base as the MAN Group will become a customer of PKC on the basis of a long-term supplier agreement signed at the same time. The closing of the deal is subject to the fulfilment of customary terms and conditions, including obtaining approval from the Polish competition authority. The parties intend to complete the deal by 31 December 2008. The acquisition price is about EUR 22 million and will be financed using internal funding and debt financing. No interest bearing liabilities will be transferred to PKC with the acquisition. The acquisition is estimated to have a slightly positive impact on the PKC Group's profit in 2009. TABLES -------------------------------------------------------------------------------- | CONSOLIDATED INCOME | 7-9/08 | 7-9/07 | 1-9/08 | 1-9/07 | 1-12/07 | | STATEMENT (1000 EUR) | 3 mon. | 3 mon. | 9 mon. | 9 mon. | 12 mon. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | 73,372 | 66,927 | 247,033 | 210,565 | 288,649 | -------------------------------------------------------------------------------- | Increase (+)/decrease | 905 | 1,444 | -1,782 | 2,499 | 4,668 | | (-) in stocks of | | | | | | | finished goods and work | | | | | | | in progress | | | | | | -------------------------------------------------------------------------------- | Other operating income | 279 | 114 | 888 | 600 | 1 009 | -------------------------------------------------------------------------------- | Raw materials and | 41,778 | 37,635 | 133,895 | 118,503 | 162,665 | | services | | | | | | -------------------------------------------------------------------------------- | Staff expenses | 17,279 | 14,567 | 57,665 | 47,003 | 66,824 | -------------------------------------------------------------------------------- | Depreciation | 2,076 | 1,913 | 6,094 | 5,622 | 7,644 | -------------------------------------------------------------------------------- | Other operating | 7,423 | 6,810 | 23,518 | 21,164 | 29,022 | | expenses | | | | | | -------------------------------------------------------------------------------- | OPERATING PROFIT | 6,000 | 7,560 | 24,967 | 21,372 | 28,171 | -------------------------------------------------------------------------------- | Interest and financial | -429 | -613 | -1,927 | -1,717 | -2,310 | | income and expenses | | | | | | -------------------------------------------------------------------------------- | Other financial income | -28 | -172 | -380 | 357 | -219 | | and expenses | | | | | | -------------------------------------------------------------------------------- | PROFIT BEFORE TAXES | 5,543 | 6,774 | 22,660 | 20,012 | 25,642 | -------------------------------------------------------------------------------- | Income taxes | -2,565 | -2,356 | -7,629 | -5,778 | -8,063 | -------------------------------------------------------------------------------- | PROFIT FOR THE REPORT | 2,978 | 4,418 | 15,031 | 14,234 | 17,579 | | PERIOD | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | | -------------------------------------------------------------------------------- | Shareholders of the | 3,054 | 4,371 | 14,993 | 14,076 | 17,374 | | parent company | | | | | | -------------------------------------------------------------------------------- | Minority intrest | 76 | -46 | -38 | -158 | -205 | -------------------------------------------------------------------------------- | Total | 2,978 | 4,417 | 15,031 | 14,234 | 17,579 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | From profit | | | | | | | attributable to | | | | | | | shareholders of the | | | | | | | parent company | | | | | | -------------------------------------------------------------------------------- | Basic earnings per | 0.17 | 0.25 | 0.84 | 0.79 | 0.98 | | share (EPS), EUR | | | | | | -------------------------------------------------------------------------------- Because diluted earnings per share would be better than the undiluted, they are not presented. -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET (1000 | 9/08 | 9/07 | 12/07 | | EUR) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | NON-CURRENT ASSETS | | | | -------------------------------------------------------------------------------- | Goodwill | 6,242 | 6,226 | 6,214 | -------------------------------------------------------------------------------- | Other intangible assets | 3,330 | 3,346 | 3,534 | -------------------------------------------------------------------------------- | Tangible assets | 34,204 | 31,952 | 34,454 | -------------------------------------------------------------------------------- | Deffered tax assets | 4,088 | 3,771 | 3,804 | -------------------------------------------------------------------------------- | Other receivables | 418 | 328 | 388 | -------------------------------------------------------------------------------- | Non-current assets total | 48,281 | 45,623 | 48,393 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CURRENT ASSSETS | | | | -------------------------------------------------------------------------------- | Inventory | 47,951 | 41,509 | 46,954 | -------------------------------------------------------------------------------- | Receivables | | | | -------------------------------------------------------------------------------- | Trade receivables | 61,112 | 66,512 | 61,176 | -------------------------------------------------------------------------------- | Other receivables | 8,007 | 7,781 | 9,001 | -------------------------------------------------------------------------------- | Receivables total | 69,119 | 74,293 | 70,176 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 15,252 | 7,946 | 10,426 | -------------------------------------------------------------------------------- | Current assets total | 132,321 | 123,748 | 127,556 | -------------------------------------------------------------------------------- | ASSETS TOTAL | 180,603 | 169,371 | 175,949 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- | EQUITY | | | | -------------------------------------------------------------------------------- | Share capital | 5,983 | 5,983 | 5,983 | -------------------------------------------------------------------------------- | Share premium account | 4,862 | 4,862 | 4,862 | -------------------------------------------------------------------------------- | Reserve fund | 370 | 258 | 239 | -------------------------------------------------------------------------------- | Translation difference | -252 | 178 | 5 | -------------------------------------------------------------------------------- | Share-based payments | 1,156 | 458 | 759 | -------------------------------------------------------------------------------- | Retained earnings | 62,923 | 53,038 | 52,970 | -------------------------------------------------------------------------------- | Profit for the reporting period | 14,993 | 14,076 | 17,374 | -------------------------------------------------------------------------------- | Minority interest | 318 | 759 | 789 | -------------------------------------------------------------------------------- | EQUITY TOTAL | 90,354 | 79,612 | 82,980 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES | | | | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 16, 210 | 30,176 | 21,078 | -------------------------------------------------------------------------------- | Non-interest-bearing liabilities | | | | -------------------------------------------------------------------------------- | Provisions | 135 | 223 | 114 | -------------------------------------------------------------------------------- | Deffered tax liabilities | 755 | 222 | 560 | -------------------------------------------------------------------------------- | Non-current liabilities total | 17,100 | 30,621 | 21,752 | -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 32,973 | 23,809 | 34,606 | -------------------------------------------------------------------------------- | Trade payables | 23,252 | 21,240 | 21,173 | -------------------------------------------------------------------------------- | Other liabilities | 16,924 | 14,090 | 15,438 | -------------------------------------------------------------------------------- | Current liabilities total | 73,149 | 59,138 | 71,217 | -------------------------------------------------------------------------------- | Liabilities total | 90,114 | 89,536 | 92,855 | -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES TOTAL | 180,603 | 169,371 | 175,949 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED CASH FLOW | 1-9/08 9 | 1-9/07 9 | 1-12/07 12 | | STATEMENT (1000 EUR) | mon. | mon. | mon. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from operating | | | | | activities | | | | -------------------------------------------------------------------------------- | Cash receipts from customers | 247,920 | 199,826 | 282,362 | -------------------------------------------------------------------------------- | Cash receipts from other | 886 | 384 | 974 | | operating activities | | | | -------------------------------------------------------------------------------- | Cash paid to suppliers and | -216 471 | -184 796 | -258 253 | | employees | | | | -------------------------------------------------------------------------------- | Cash flows from operations | 32,335 | 15,413 | 25,082 | | before financial income and | | | | | expenses and taxes | | | | -------------------------------------------------------------------------------- | Interest paid | -3,266 | -1,597 | -2,745 | -------------------------------------------------------------------------------- | Interest received and other | 2,024 | 942 | 817 | | financial income | | | | -------------------------------------------------------------------------------- | Income taxes paid | -5,508 | -6,924 | -10,497 | -------------------------------------------------------------------------------- | Net cash from operating | 25,585 | 7,833 | 12,658 | | activities (A) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from investig | | | | | activities | | | | -------------------------------------------------------------------------------- | Purchase of tangible and | -5,419 | -7,835 | -11,143 | | intanginle assets | | | | -------------------------------------------------------------------------------- | Proceeds from sale of | 0 | 200 | 108 | | tangible and intangible | | | | | assets | | | | -------------------------------------------------------------------------------- | Investments | -46 | -1 298 | -1,380 | -------------------------------------------------------------------------------- | Loans granted | -8 | -30 | -11 | -------------------------------------------------------------------------------- | Amortisations of loan | 43 | 7 | 9 | | received | | | | -------------------------------------------------------------------------------- | Dividens received | 1 | 1 | 1 | -------------------------------------------------------------------------------- | Net cash flows from | -5,430 | -8,955 | -12,416 | | investing activities (B) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from financing | | | | | activities | | | | -------------------------------------------------------------------------------- | Drawing of credits | 3,658 | 15,555 | 18,843 | -------------------------------------------------------------------------------- | Amortasations of credits | -10,883 | -5,981 | -8,642 | -------------------------------------------------------------------------------- | Dividends paid | -8,104 | -8,565 | -8,077 | -------------------------------------------------------------------------------- | Net cash used in financing | -15,329 | 1,008 | 2,123 | | activities (C) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net increase (+) or decrease | 4,826 | -114 | 2,365 | | (-) in cash and equivalents | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | GROUP KEY FINANCIAL | 1-9/08 9 | 1-9/07 9 | 1-12/07 12 | | INDICATORS | mon. | mon. | mon. | -------------------------------------------------------------------------------- | Net sales, 1000 EUR | 247,033 | 210,565 | 288,649 | -------------------------------------------------------------------------------- | Operating profit, 1000 EUR | 24,967 | 21,372 | 28,171 | -------------------------------------------------------------------------------- | % of net sales | 10.1 | 10.1 | 9.8 | -------------------------------------------------------------------------------- | Profit before taxes, 1000 | 22,660 | 20,012 | 25,642 | | EUR | | | | -------------------------------------------------------------------------------- | % of net sales | 9.2 | 9.5 | 8.9 | -------------------------------------------------------------------------------- | Net profit for the period, | 14,993 | 14,076 | 17,374 | | 1000 EUR | | | | -------------------------------------------------------------------------------- | % of net sales | 6.1 | 6.7 | 6.0 | -------------------------------------------------------------------------------- | Return on equity, (ROE) % | 23.1 | 24.9 | 22.6 | -------------------------------------------------------------------------------- | Return on investments, (ROI) | 25.8 | 24.1 | 23.4 | | % | | | | -------------------------------------------------------------------------------- | Net liabilities, 1000 EUR | 33,931 | 46,038 | 45,258 | -------------------------------------------------------------------------------- | Gearing, % | 37.6 | 57.8 | 54.5 | -------------------------------------------------------------------------------- | Equity ratio, % | 50.0 | 47.0 | 47.2 | -------------------------------------------------------------------------------- | Current ratio | 1.8 | 2.1 | 1.8 | -------------------------------------------------------------------------------- | Gross capital expenditure, | 5,210 | 6,482 | 10,791 | | 1000 EUR | | | | -------------------------------------------------------------------------------- | % of net sales | 2.1 | 3.1 | 3.7 | -------------------------------------------------------------------------------- | R&D expenditures, 1000 EUR | 4 444 | 3,871 | 5,511 | -------------------------------------------------------------------------------- | % of net sales | 1.8 | 1.8 | 1.9 | -------------------------------------------------------------------------------- | Personnel average | 5,636 | 4,876 | 4,971 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | GROUP PER-SHARE KEY FIGURES | 1-9/08 9 | 1-9/07 9 | 1-12/07 12 | | | mon. | mon. | mon. | -------------------------------------------------------------------------------- | Earnings per share (EPS), | 0.84 | 0.79 | 0.98 | | EUR | | | | -------------------------------------------------------------------------------- | Equity per share, EUR | 5.06 | 4.43 | 4.62 | -------------------------------------------------------------------------------- | Share price at end of | 6.60 | 10.65 | 8.70 | | period, EUR | | | | -------------------------------------------------------------------------------- | Lowest share price, EUR | 6.57 | 9.17 | 8.55 | -------------------------------------------------------------------------------- | Highest share price, EUR | 9.48 | 12.40 | 12.40 | -------------------------------------------------------------------------------- | Average share price, EUR | 7.59 | 10.69 | 10.48 | -------------------------------------------------------------------------------- | Turnover in shares, 1000 | 9,461 | 13,641 | 17,640 | | shares | | | | -------------------------------------------------------------------------------- | Turnover in shares per | 53.20 | 76.71 | 99.20 | | (share issue adjusted) share | | | | | capital, % | | | | -------------------------------------------------------------------------------- | Average number of shares, | 17,782 | 17,782 | 17,782 | | 1000 shares | | | | -------------------------------------------------------------------------------- | Average number of shares, | 17,535 | 17,768 | 17,782 | | diluted,1000 shares | | | | -------------------------------------------------------------------------------- | Shares at end of period, | 17,782 | 17,782 | 17,782 | | 1000 shares | | | | -------------------------------------------------------------------------------- | Market capitalisation, 1000 | 117,358 | 189,373 | 154,699 | | EUR | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1. SEGMENT INFORMATION | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES BY BUSINESS | 7-9/08 | 7-9/07 | 1-9/08 | 1-9/07 | 1-12/07 | | SEGMENTS | 3 mon. | 3 mon. | 9 mon. | 9 mon. | 12 mon. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Wiring Harnesses, 1000 | 56,973 | 50 225 | 195 869 | 168 168 | 230 183 | | EUR | | | | | | -------------------------------------------------------------------------------- | Net sales to other | -20 | -65 | -151 | -122 | -170 | | segments, 1000 EUR | | | | | | -------------------------------------------------------------------------------- | Wiring Harnesses, | 56,953 | 50 160 | 195 718 | 168 047 | 230 013 | | total, 1000 EUR | | | | | | -------------------------------------------------------------------------------- | Wiring Harnesses, % of | 77.6 | 74.9 | 79.2 | 79.8 | 79.7 | | net sales | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Electronics, 1000 EUR | 16,537 | 17 030 | 51 900 | 43 169 | 59 471 | -------------------------------------------------------------------------------- | Net sales to other | -118 | -263 | -585 | -651 | -835 | | segments, 1000 EUR | | | | | | -------------------------------------------------------------------------------- | Electronics, total, | 16,419 | 16,767 | 51,315 | 42,518 | 58,636 | | 1000 EUR | | | | | | -------------------------------------------------------------------------------- | Electronics, % of net | 22.4 | 25.1 | 20.8 | 20.2 | 20.3 | | sales | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group Total | 73,372 | 66,927 | 247,033 | 210,565 | 288,649 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT BY | | | | | | | BUSINESS SEGMENTS | | | | | | -------------------------------------------------------------------------------- | Wiring Harnesses, 1000 | 3,856 | 3,314 | 15,961 | 13,825 | 18,746 | | EUR | | | | | | -------------------------------------------------------------------------------- | Wiring Harnesses, % of | 6.8 | 6.6 | 8.2 | 8.2 | 8.2 | | net sales | | | | | | -------------------------------------------------------------------------------- | Electronics, 1000 EUR | 2,144 | 4,246 | 9,007 | 7,547 | 9,424 | -------------------------------------------------------------------------------- | Electronics, % of net | 13.1 | 25.3 | 17.6 | 17.8 | 16.1 | | sales | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group Total | 6,000 | 7,560 | 24,967 | 21,372 | 28,171 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES BY | | | | | | | GEOGRAPHICAL SEGMENTS | | | | | | | (1000 EUR) | | | | | | -------------------------------------------------------------------------------- | Finland | 15,004 | 14,226 | 45,517 | 40,599 | 54,411 | -------------------------------------------------------------------------------- | Other Europe | 31,990 | 31,375 | 121,985 | 110,859 | 153,727 | -------------------------------------------------------------------------------- | North America | 7,706 | 7,257 | 26,292 | 23,661 | 30,692 | -------------------------------------------------------------------------------- | South America | 14,196 | 9,331 | 38,009 | 26,643 | 36,145 | -------------------------------------------------------------------------------- | Other Countries | 4,477 | 4,738 | 15,229 | 8,802 | 13,673 | -------------------------------------------------------------------------------- | Total | 73,372 | 66,927 | 247,033 | 210,565 | 288,649 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 2. RECONCILIATION OF EQUITY (MILLION EUR) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | A = Share Capital | -------------------------------------------------------------------------------- | B = Share premium account | -------------------------------------------------------------------------------- | C = Fair value and other reserves |-------------------------------------------------------------------------------- | D = Retained earnings | -------------------------------------------------------------------------------- | E = Minority interest | -------------------------------------------------------------------------------- | F = Total equity | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | A | B | C | D | E | F | -------------------------------------------------------------------------------- | Shareholders' equity | 6.0 | 4.9 | 0.2 | 60.9 | 0.6 | 72.5 | | 1.1.2007 | | | | | | | -------------------------------------------------------------------------------- | Profit for the period | 0.0 | 0.0 | 0.0 | 14.2 | 0.2 | 14.4 | -------------------------------------------------------------------------------- | Dividends | 0.0 | 0.0 | 0.0 | -8.0 | 0.0 | -8.0 | -------------------------------------------------------------------------------- | Share options used | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Translation | 0.0 | 0.0 | 0.0 | 0.2 | 0.0 | 0.2 | | differences | | | | | | | -------------------------------------------------------------------------------- | Other changes | 0.0 | 0.0 | 0.1 | -0.2 | 0.0 | -0.1 | -------------------------------------------------------------------------------- | Shareholders' equity | 6.0 | 4.9 | 0.3 | 67.6 | 0.8 | 79.6 | | 30.9.2007 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity | 6.0 | 4.9 | 0.2 | 71.1 | 0.8 | 83.0 | | 1.1.2008 | | | | | | | -------------------------------------------------------------------------------- | Profit for the period | 0 | 0 | 0 | 15.0 | 0.0 | 15.0 | -------------------------------------------------------------------------------- | Dividends | 0 | 0 | 0 | -8.0 | 0 | -8.1 | -------------------------------------------------------------------------------- | Share-based payments | 0 | 0 | 0 | 0.4 | 0 | 0.4 | -------------------------------------------------------------------------------- | Translation | 0 | 0 | 0 | 0.5 | 0 | 0.5 | | differences | | | | | | | -------------------------------------------------------------------------------- | Other changes | 0 | 0 | 0.1 | -0.1 | 0 | 0 | -------------------------------------------------------------------------------- | Shareholders' equity | 6.0 | 4.9 | 0.4 | 78.8 | 0.3 | 90.4 | | 30.9.2008 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 3. GROUP CONTINGENT LIABILITIES AT | 9/08 | 9/07 | 12/07 | | END OF PERIOD (1000 EUR) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Leasing liabilities | 6,345 | 5,804 | 5,668 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities for derivate instruments | | | | -------------------------------------------------------------------------------- | Nominal values | | | | -------------------------------------------------------------------------------- | Currency derivates | | | | -------------------------------------------------------------------------------- | Forward contracts | 7,123 | 5,804 | 5,740 | -------------------------------------------------------------------------------- | Option agreements | | | | -------------------------------------------------------------------------------- | Call | 1,649 | 0 | 1,598 | -------------------------------------------------------------------------------- | Total | 8,772 | 5,804 | 7,338 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Fair values | | | | -------------------------------------------------------------------------------- | Currency derivates | | | | -------------------------------------------------------------------------------- | Forward contracts | 3 | -79 | -105 | -------------------------------------------------------------------------------- | Option agreements | | | | -------------------------------------------------------------------------------- | Call | -186 | 0 | -144 | -------------------------------------------------------------------------------- | Total | -183 | -79 | -249 | -------------------------------------------------------------------------------- Currency derivates are used only in hedging currency risks. PKC Group does not apply hedge accounting to derivate instruments in accordance with IAS 39. Fair values of the derivates are entered directly in the income statement. -------------------------------------------------------------------------------- | 4. QUARTERLY KEY | 4-6/07 | 6-9/07 | 10-12/ | 1-3/08 | 4-6/08 | 7-9/08 | | FIGURES, | 3 mon. | 3 mon. | 07 3 | 3 mon. | 3 mon. | 3 mon. | | CONSOLIDATED | | | mon. | | | | -------------------------------------------------------------------------------- | Net sales, 1000 EUR | 73.67 | 66.93 | 78.08 | 85.09 | 88.57 | 73.37 | -------------------------------------------------------------------------------- | Operating profit, | 7.34 | 7.56 | 6.8 | 9.34 | 9.63 | 6.0 | | 1000 EUR | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 10.0 | 11.3 | 8.7 | 11.0 | 10.9 | 8.2 | -------------------------------------------------------------------------------- | Profit before taxes, | 7.14 | 6.77 | 5.63 | 7.31 | 9.81 | 5.54 | | 1000 EUR | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 9.7 | 10.1 | 7.2 | 8.6 | 11.1 | 7.6 | -------------------------------------------------------------------------------- | Equity ratio, % | 45.9 | 47.0 | 47.2 | 46.0 | 48.6 | 50.0 | -------------------------------------------------------------------------------- | Earnings per share | 0.30 | 0.25 | 0.19 | 0.26 | 0.41 | 0.17 | | (EPS), diluted (EUR) | | | | | | | -------------------------------------------------------------------------------- | Shareholders' equity | 4.18 | 4.43 | 4.62 | 4.39 | 4.82 | 5.06 | | per share, EUR | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | QUARTERLY KEY | | | | | | | | FIGURES, WIRING | | | | | | | | HARNESSESS | | | | | | | -------------------------------------------------------------------------------- | Net sales, 1000 EUR | 59.77 | 50.16 | 61.97 | 69.32 | 69.29 | 56.95 | -------------------------------------------------------------------------------- | Operating profit, | 5.57 | 3.31 | 4.61 | 7.02 | 5.09 | 3.86 | | 1000 EUR | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 9.3 | 6.6 | 7.4 | 10.1 | 7.3 | 6.8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | QUARTERLY KEY | | | | | | | | FIGURES, ELECTRONICS | | | | | | | -------------------------------------------------------------------------------- | Net sales, 1000 EUR | 13.91 | 16.77 | 16.12 | 15.77 | 19.28 | 16.42 | -------------------------------------------------------------------------------- | Operating profit, | 1.77 | 4.25 | 2.19 | 2.32 | 4.54 | 2.14 | | 1000 EUR | | | | | | | -------------------------------------------------------------------------------- | % of net sales | 12.7 | 25.3 | 13.6 | 14.7 | 23.5 | 13.1 | -------------------------------------------------------------------------------- CALCULATION OF INDICATORS Return on equity (ROE), % = 100 x (Profit before extraordinary items - taxes) / Shareholders' equity + minority interest (average) Return on investments (ROI), % = 100 x (Profit before extraordinary items - interest and other financial expenses) / Balance sheet total - non-interest-bearing liabilities (average) Gearing, % = 100 x (Interest-bearing liabilities - cash in hand and at bank and investments) / Shareholders' equity + minority interest Equity ratio, % = 100 x (Shareholders' equity + minority interest) / Balance sheet total - advance payments received Quick ratio = Receivables and cash in hand and at bank / Current liabilities - advance payments received Current ratio Receivables and cash in hand and at bank + inventories / Current liabilities Earnings per share (EPS), EUR Profit before extraordinary items - income taxes +/- minority interest / Average share issue-adjusted number of shares Shareholders' equity per share, EUR Shareholders' equity / Share issue-adjusted number of shares on the balance sheet date Market capitalisation Number of shares at the end of the financial period x the last trading price of the financial period The figures presented have not been audited. This Quarterly Report has been prepared in accordance with International Financial Reporting Standards (IFRS). 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 20 1752 350 PRESS CONFERENCE A press conference on the Interim Report will be arranged for analysts and investors today, 21 October 2008, at 9.00 a.m., at the address World Trade Center, Meeting room 4, Aleksanterinkatu 17, 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 Finland, Brazil, China, Mexico, Estonia and Russia, and employs over 5,500 people. The Group's net sales in 2007 totalled EUR 288.6 million. PKC Group Oyj is listed on NASDAQ OMX Helsinki Ltd.
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