Investor Presentation Q1 2015 Profitability improved significantly, - PowerPoint PPT Presentation

Investor Presentation Q1 2015 Profitability improved significantly, strategy execution proceeding May 6, 2015 Matti Hyytiäinen, President & CEO PKC Investor Presentation Q1 2015

Q1 2015 Highlights Business Environment • Record freight demand and expansion of fleet capacity continue to drive class 8 truck demand in North America • More optimism in Europe emerging while Brazilian market deteriorating further PKC’s Operations • Increased labor force within an overheated job market in North America resulted in suboptimal productivity and premium freight expenses • Development program progressing in Europe and South America PKC’s Financial Performance • Comparable EBITDA increased substantially • Negative cash flow due to seasonally increased working capital May 6, 2015 PKC Investor Presentation Q1 2015 2

North American Market Production units Production units 90,000 400,000 EPA 2014 EPA 2014 +6% 80,000 350,000 +14% 70,000 +21% 300,000 +14% 60,000 -5% 250,000 +12% -1% 50,000 200,000 40,000 -3% 150,000 30,000 100,000 20,000 50,000 10,000 0 0 2011 2012 2013 2014 2015 2016 2017 2018 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Source: LMC Automotive forecasting Q4/2014 Heavy Duty Trucks Medium Duty Trucks Heavy Duty Trucks Medium Duty Trucks Production units Market Share 1-3/2015 12,000,000 10,000,000 +3% +9% 8,000,000 34% 42% 6,000,000 58% 4,000,000 66% 2,000,000 0 Heavy Duty Trucks Medium Duty Trucks 2011 2012 2013 2014 2015 2016 2017 2018 Light Vehicle (Pick-up and SUV) Source: LMC Automotive forecasting Q1/2015, ACT Build History April 2015, PKC Group May 6, 2015 PKC Investor Presentation Q1 2015 3

EU27 + EFTA Market Production units Production units 120,000 450,000 EURO 6 EURO 6 400,000 100,000 350,000 +6% +14% -8% -5% 80,000 300,000 250,000 60,000 200,000 -3% 40,000 150,000 100,000 +5% -19% -2% 20,000 50,000 0 0 2011 2012 2013 2014 2015 2016 2017 2018 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Source: LMC Automotive forecasting Q4/2014 Heavy Duty Trucks Medium Duty Trucks Heavy Duty Trucks Medium Duty Trucks PKC estimates production volume to remain on previous year’s level Market Share 1-3/2015 25% 41% 59% 75% Heavy Duty Trucks Medium Duty Trucks Source: LMC Automotive forecasting Q1/2015, PKC Group May 6, 2015 PKC Investor Presentation Q1 2015 4

Brazilian Market Production units Production units 45,000 160,000 40,000 140,000 -13% 35,000 120,000 +14% -8% 30,000 100,000 25,000 -35% 80,000 20,000 -3% 60,000 15,000 -13% -4% 40,000 10,000 -5% 20,000 5,000 0 0 2011 2012 2013 2014 2015 2016 2017 2018 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Source: LMC Automotive forecasting Q4/2014 Heavy Duty Trucks Medium Duty Trucks Heavy Duty Trucks Medium Duty Trucks PKC estimates production volume to be clearly lower than previous year Market Share 1-3/2015 2% 30% 70% 98% Heavy Duty Trucks Medium Duty Trucks Source: LMC Automotive forecasting Q1/2015, PKC Group May 6, 2015 PKC Investor Presentation Q1 2015 5

China Market Production units Production units 900,000 250,000 EURO 4 EURO 4 800,000 -2% 200,000 700,000 +14% -20% 600,000 150,000 500,000 -23% 400,000 -3% 100,000 300,000 -13% -11% 200,000 50,000 -37% 100,000 0 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 2011 2012 2013 2014 2015 2016 2017 2018 Source: LMC Automotive forecasting Q4/2014 Heavy Duty Trucks Medium Duty Trucks Heavy Duty Trucks Medium Duty Trucks Market Share 1-3/2015 1% 0% 99% 100% Heavy Duty Trucks Medium Duty Trucks Source: LMC Automotive forecasting Q1/2015, PKC Group May 6, 2015 PKC Investor Presentation Q1 2015 6

Revenue Europe North America EUR million EUR million 250 250 200 200 138.2 150 150 129.4 129.4 120.5 114.5 100 100 9.7 8.4 9.6 7.8 50 9.6 50 54.5 51.9 53.3 53.9 45.5 0 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 South America Total Group EUR million EUR million 250 250 20.8 14.8 12.5 200 200 14.7 15.4 150 150 205.7 100 100 196.7 195.4 191.3 188.6 50 50 19.5 17.0 16.7 12.7 12.3 0 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 May 6, 2015 PKC Investor Presentation Q1 2015 7

Average Number of Personnel Europe North America 25,000 25,000 20,000 20,000 15,000 15,000 12,265 12,306 12,212 11,507 11,081 10,000 10,000 233 252 233 5,000 5,000 236 242 5,131 5,362 5,248 4,676 4,661 0 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 South America Total Group 25,000 25,000 631 583 580 20,000 20,000 652 616 15,000 15,000 10,000 10,000 20,136 20,164 19,835 19,004 18,659 5,000 5,000 2,838 2,766 2,668 2,520 2,213 0 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 May 6, 2015 PKC Investor Presentation Q1 2015 8

Market Outlook – Full Year 2015 • European heavy-duty and medium-duty truck production is estimated to remain on previous year’s level. • North American heavy-duty truck production is estimated to increase by 14% and medium-duty truck production to decline by 1% compared to 2014. • Brazilian heavy-duty and medium-duty truck production is estimated to be clearly lower than previous year. • The market demand for Electronics segment’s products is expected to slightly decrease compared to the current level. May 6, 2015 PKC Investor Presentation Q1 2015 9

PKC Group’s Outlook • 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. • Revenue and EBITDA estimates are based on current business structure. • In 2014, PKC’s revenue was EUR 829.5 million and comparable EBITDA before non-recurring items was EUR 48.6 million. PKC Group has reclassified certain financial items and operating expenses as of the beginning of 2015. The changes are minor and comparison periods have been adjusted accordingly. May 6, 2015 PKC Investor Presentation Q1 2015 10

Key Figures EUR million 1-3/15 1-3/14 Change 1-12/14 % Revenue 226.5 204.1 +11.0 829.5 EBITDA 1) 16.7 11.8 +41.7 48.6 EBITDA 1) % 7.4 5.8 5.9 Non-recurring items -0.6 -2.7 -28.4 Operating profit (loss) 8.6 2.6 +230.7 -7.0 EPS (EUR) 0.18 0.04 +379.3 -1.21 Cash flow from operations -29.7 -12.8 41.0 Gross capital expenditure 2.4 6.5 -63.4 19.9 Core working capital 2) 103.5 99.2 +4.4 70.2 ROCE, % 3) 13.3 7.2 7.7 Gearing, % 8.8 8.6 -5.6 1) Excluding PPA depreciation and amortisation and non-recurring asset impairment and write-downs 2) Inventories + trade receivables - trade payables 3) ROCE, % = Adjusted operating profit (excl. NRIs) / (Total equity + interest-bearing liabilities)(average)) May 6, 2015 PKC Investor Presentation Q1 2015 11

Wiring Systems Segment, Q1 2015 EUR million 230 • Revenue increased +9% including 220 FX impact of +13% 210 205.7 – Light-vehicle build-outs reduced 196.7 200 195.4 191.3 revenue in North America which was 188.6 190 compensated by higher truck revenue 180 – Europe close to previous year level – Revenue in Brazil decreased due to 170 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 poor market conditions Revenue • EUR million % Adjusted EBITDA improved clearly 7.1 7.9 7.4 20 8 6.2 5.5 – Lower losses in Brazil and favorable 15 6 FX translation impact 10 4 15.5 15.3 13.5 11.7 5 10.7 2 – Additional expenses in North America 0.0 0 0 to meet increased demand of trucks -2.1 -1.0 -7.4 -5 -9.7 -2 – Development program in Europe and -10 -4 Brazil continuing as planned Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 EBITDA excl. NRIs NRIs EBITDA excl. NRIs, % of revenue May 6, 2015 PKC Investor Presentation Q1 2015 12

Electronics Segment, Q1 2015 EUR million 25 20.8 20 • Revenue increased 35% from 15.4 14.8 14.7 comparison period 15 12.5 • Increased revenue of own 10 products had a favorable impact on profitability 5 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Revenue EUR million % 4.0 16 13.6 3.5 14 3.0 12 2.5 10 8.0 2.0 6.5 8 5.2 1.5 6 2.8 1.0 4 1.4 1.2 0.5 2 1.0 0.8 0.2 0.0 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 EBITDA excl. NRIs EBITDA excl. NRIs, % of revenue May 6, 2015 PKC Investor Presentation Q1 2015 13

Net Working Capital % EUR million 250 18 62.3 66.9 200 81.6 16 78.2 26.2 89.4 83.4 150 14 80.4 82.2 79.4 100 12 116.8 112.3 105.7 50 102.8 10 89.0 0 8 -87.0 -86.3 -50 -95.9 -98.3 6 -102.7 -17.6 -20.5 -100 4 -32.9 -44.0 -41.2 -150 2 -200 0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Inventories Trade receivables Trade payables Other liabilities and receivables*** NWC* % of Revenue** Core working capital* % of Revenue** * Average of previous four quarters ** Revenue of previous 12 months *** Related to employee benefits, taxes and financial items. Since Q3/14 includes additional tax liability of EUR 8.3 million and non-recurring items booked, but not paid. Core working capital = Inventories + trade receivables – trade payables May 6, 2015 PKC Investor Presentation Q1 2015 14