INVESTOR PRESENTATION Q3 2013 October 31, 2013 Matti Hyytiäinen, President & CEO
Q3/2013 Highlights Business Environment • Truck production volumes improved from second quarter in Brazil and remained unchanged in Europe • North American truck demand was softer than earlier forecasted PKC’s Operations • Several production transfers and ramp-ups of current and new customers’ programs on- going in Europe • Received major recognitions and awards on quality and delivery performance from two main accounts in North America PKC’s Financial Performance • EBITDA% was burdened by product transfers and ramp ups in Europe, and higher labour and material costs in Brazil • Cash flow improved from the first half of the year PKC Investor Presentation Q3 2013 2
Strategy 2018 Update Maximizing current PKC set-up • East/Midwest region office established in USA to focus on growth opportunities with existing and new accounts • Decision to establish wiring systems factory in Serbia to serve existing and potential new customers in Europe Penetrating into APAC • Framework Agreement for Strategic Cooperation signed with SINOTRUK on the opportunity to establish a joint venture to manufacture wiring systems for SINOTRUK and possibly also for other customers in China and abroad Funding • The issue of 2.14 million new shares (proceeds EUR 44.9 million) and EUR 100 million fixed rate unsecured bond maturing in 2018 • The proceeds are intended for refinancing, general corporate purposes and to enable strategy execution incl. potential acquisitions PKC Investor Presentation Q3 2013 3
Key Figures, 7-9/2013 EUR million 7-9/13 7-9/12 Change % 1-12/12 Revenue 211.6 227.4 -7.0 928.2 EBITDA 17.0 22.5 -24.5 83.0 Depreciation and amortisation 1) 4.7 4.6 1.1 17.6 EBITA 12.3 17.9 -31.1 65.4 PPA depreciation and amortisation 2.7 3.5 -22.8 13.9 Operating profit 9.6 14.4 -33.1 51.5 Non-recurring items 1.7 1.9 -9.9 8.0 Operating profit after non-recurring items 7.9 12.5 -36.6 43.5 Financial items -2.4 -2.7 -12.3 -8.5 Taxes -2.6 -3.1 -18.9 -10.9 Net profit 3.0 6.7 -54.8 24.0 EPS (EUR) 0.14 0.31 -54.8 1.12 1) Excluding PPA depreciation and amortisation and non-recurring asset impairment and write-downs PKC Investor Presentation Q3 2013 4
Key Figures, 1-9/2013 EUR million 1-9/13 1-9/12 Change % 1-12/12 Revenue 671.9 714.2 -5.9 928.2 EBITDA 56.4 65.8 -14.3 83.0 Depreciation and amortisation 1) 13.8 12.6 9.5 17.6 EBITA 42.6 53.2 -19.9 65.4 PPA depreciation and amortisation 8.4 10.6 -20.7 13.9 Operating profit 34.2 42.6 -19.7 51.5 Non-recurring items 8.3 3.2 164.3 8.0 Operating profit after non-recurring items 25.9 39.4 -34.4 43.5 Financial items -6.2 -5.2 20.5 -8.5 Taxes -7.5 -11.0 -32.0 -10.9 Net profit 12.1 23.3 -47.8 24.0 EPS (EUR) 0.55 1.09 -49.5 1.12 1) Excluding PPA depreciation and amortisation and non-recurring asset impairment and write-downs PKC Investor Presentation Q3 2013 5
Revenue EUR million 260 244.8 242.0 240 235.1 227.4 225.2 220 214.0 211.6 200 180 2012 2013 Q1 Q2 Q3 Q4 PKC Investor Presentation Q3 2013 6
Geographical Split Revenue 7-9/2013 Average Number of Personnel EUR million 7-9/2013 60% 120.3 70% 50% 60% 11,051 Temporary employees included 40% 50% 65.3 40% 30% 56.8 % 5.1 % 30% 57.4 % 4,670 20% 1.4 % 20% 20.5 3,076 25.7 % 10% 0.2 % 22.9 % 5.5 10% 439 16.0 % 9.5 % 1.9 % 2.0 % 0% 0.7 % 0% 0.3 % North Europe South APAC North Europe South APAC America America America America Wiring Systems Electronics Wiring Systems Electronics PKC Investor Presentation Q3 2013 7
Profitability EUR million % 24 12 22 9.9 20 10 9.4 8.8 18 8.4 8.3 8.0 8.0 7.9 7.8 16 8 6.8 6.7 14 6.3 5.8 5.7 12 6 22.9 22.5 20.6 20.4 10 19.2 18.8 17.9 17.2 17.0 16.2 8 16.1 4 14.2 12.3 6 12.2 4 2 2 0 0 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 EBITDA (adjusted*) EBITA (adjusted**) EBITDA* % EBITA** % * excluding non-recurring items in EBITDA ** excluding non-recurring items and PPA depreciation and amortisation in operating profit PKC Investor Presentation Q3 2013 8
Earnings, Cash Flow and Dividend per Share EUR 3.5 2.97 3.0 2.43 2.5 2.0 1.46 1.5 1.16 1.12 1.09 1.0 0.70 0.60 0.55 0.5 0.29 0.0 2011 2012 1-9/12 1-9/13 Earnings per share Free cash flow (excl. acquisitions) per share Dividend per share PKC Investor Presentation Q3 2013 9
Net Working Capital EUR million % 250 25 100.7 90.7 96.9 82.7 81.0 83.2 82.0 200 20 72.7 97.6 110.5 108.4 87.8 92.1 150 92.1 87.7 15 87.5 100 10 112.7 112.9 109.0 106.1 50 104.0 104.1 104.5 5 84.6 0 0 -75.5 -88.4 -90.8 -91.3 -90.6 -90.8 -94.8 -50 -5 -101.6 -23.8 -100 -23.4 -10 -23.0 -22.1 -23.2 -26.6 -25.3 -20.3 -150 -15 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Inventories Trade receivables Trade receivables Inventories Trade payables Other liabilities and receivables*** NWC* % of Revenue** * Average of previous four quarters ** Revenue of previous 12 months *** related to employee benefits, taxes and financial items PKC Investor Presentation Q3 2013 10
Cash Flow EUR million 100 76.0 80 63.7 60.8 52.1 60 40.0 40 16.8 20 6.4 0 -8.7 -20 -10.3 -12.3 -40 -60 -50.2 -80 -100 -90.2 2011 2012 1-9/12 1-9/13 Cash from operations Capital expenditure Free cash flow PKC Investor Presentation Q3 2013 11
Balance Sheet and Returns % % 45 80 72.6 39.1 40 70 33.9 32.5 35 60 30.0 30 50 42.0 25 40 34.4 20 30 15 20 10 9.0 10 5 0 0 2011 2012 Q3/12 Q3/13 2011 2012 Q3/12 Q3/13 Gearing, % Equity ratio, % EUR million % 120 2.4 30 110.7 100 2.0 25 2.1 20.1 19.5 18.9 80 1.6 20 69.4 17.0 16.7 15.1 15.2 56.6 60 1.2 15 9.0 40 0.8 10 0.9 17.8 0.7 20 0.4 5 0.3 0 0.0 0 2011 2012 Q3/12 Q3/13 2011 2012 1-9/12 1-9/13 Net debt Net debt to EBITDA* ROE, % ROI, % *EBITDA of previous 12 months PKC Investor Presentation Q3 2013 12
Wiring Systems Segment, Q3/2013 Revenue EUR million 226.8 226.6 230 • Revenue decreased 10% from previous 217.2 220 quarter and 6% from previous year 209.2 208.4 210 200 196.4 196.1 • Headcount was reduced in Brazil despite growing volumes. Weaker real and 190 continuing labour cost inflation had a 180 negative impact on profitability 2012 2013 Q1 Q2 Q3 Q4 – target is to return to profitability in 2014 Adjusted Operating Profit – actions to reduce headcount and fixed cost EUR million Illustrated net of non-recurring items 20 are continuing 15.4 15.2 14.2 – in addition, supply chain is being 15 13.3 11.7 streamlined 9.6 8.7 10 5 0 2012 2013 Q1 Q2 Q3 Q4 PKC Investor Presentation Q3 2013 13
PKC Market Share 1-9/2013 • Current business relationship with all key western OEMs in commercial vehicle industry enable future growth • Global leader position as a target Europe Brazil North America APAC 1% 33% 37% 41% Heavy Commercial 59% 63% 67% Vehicle 99% 0% 2% 17% Medium 34% Commercial 66% Vehicle 83% 100% 98% PKC Other Source: PKC Group, ACT Build History October 2013, LMC Automotive forecasting Q3/2013. Note: Europe comprised of EU27 + Efta PKC Investor Presentation Q3 2013 14
EU27+ EFTA Truck Production units 500,000 EURO 6 450,000 400,000 350,000 -1% 300,000 -6% 250,000 200,000 150,000 100,000 0% -8% 50,000 0 Q1-Q3 Q1-Q3 2012 2013 2014 2015 2016 2017 2018 2012 2013 Heavy Trucks Medium Trucks Source: LMC Automotive forecasting Q3/2013 • Q3/13 heavy duty production volumes were flat compared to Q2/13 and up by 1% from Q3/12. Medium duty volumes decreased -4% from Q2/13 • Full year 2013 heavy duty forecast has been increased, but is still down slightly by about -1% from 2012 (previous forecast -6%) and medium truck production to remain unchanged compared to 2012 level • Due to upcoming Euro 6 standard volumes are expected to increase in Q4/13 PKC Investor Presentation Q3 2013 15
North America Truck & LCV Production units EPA 2014 350,000 300,000 -10% 250,000 +7% -15% 200,000 +7% 150,000 100,000 50,000 0 Q1-Q3 Q1-Q3 2012 2013 2014 2015 2016 2017 2018 2012 2013 Heavy Trucks Medium Trucks Source: LMC Automotive forecasting Q3/2013 10,000,000 +5% 9,000,000 • Heavy duty truck production volume was 8,000,000 +6% 7,000,000 down -4% from previous quarter, but 6,000,000 5,000,000 unchanged year-on-year 4,000,000 3,000,000 • Full year heavy duty production estimate is 2,000,000 down by -10%, medium duty up by +7% 1,000,000 0 (earlier -6% and +7% respectively) Q1- Q1- 2012 2013 2014 2015 2016 2017 2018 Q3 Q3 • LCV production volume estimate is 2012 2013 Light Commercial Vehicle (Pick-up and SUV) unchanged at +5% PKC Investor Presentation Q3 2013 16
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