Investor Presentation Q4 2014 Strong cash flow, lower comparable EBITDA and revenue February 12, 2015 Matti Hyytiäinen, President & CEO PKC Investor Presentation Q4 2014
Q4/2014 Highlights Business Environment • European truck production decreased significantly from previous year • North American truck production increased from previous year driven by replacement and expansion sales PKC’s Operations • Utilization rates improved in North America, but with additional costs • Development program progressing in Europe and South America PKC’s Financial Performance • Strong cash flow after capex of EUR 30.7 million in the fourth quarter • Comparable EBITDA and revenue decreased from previous quarter • Dividend proposal is EUR 0.70 per share February 12, 2015 PKC Investor Presentation Q4 2014 2
Strategy 2018 Update Maximizing current PKC set-up • Nogales (Mexico), Sosnowiec (Poland), Haapsalu (Estonia) and Itajuba (Brazil) factories practically closed by year end of 2014 • New flexible and cost-efficient factories in Lithuania and Serbia are in production and continue to be further ramped up Penetrating into APAC • Quotation activities are on a high level in China • Implementation of the strategy is proceeding, and focus has been on several projects during the quarter February 12, 2015 PKC Investor Presentation Q4 2014 3
Key Figures EUR million 10-12/14 10-12/13 Change 1-12/14 1-12/13 Change % % Revenue 208.5 212.1 -1.7 829.2 884.0 -6.2 EBITDA 1) 9.1 13.9 -34.5 48.9 70.3 -30.5 EBITDA 1) % 4.4 6.6 5.9 8.0 Non-recurring items -11.7 -2.1 -28.4 -10.4 Operating profit (loss) -9.6 4.6 -6.7 30.5 EPS (EUR) -0.63 0.08 -1.21 0.63 Cash flow from operations 34.4 23.0 41.0 39.7 Gross capital expenditure 4.0 4.1 19.9 14.6 Net working capital 2) 26.2 63.5 26.2 63.5 Total assets 456.3 455.6 456.3 455.6 Gearing, % -5.6 -1.1 -5.6 -1.1 1) Excluding PPA depreciation and amortisation and non-recurring asset impairment and write-downs 2) Includes additional tax liability of EUR 8.3 million February 12, 2015 PKC Investor Presentation Q4 2014 4
Revenue Europe North America EUR million EUR million 250 250 200 200 150 150 130.7 128.9 129.7 129.1 120.7 120.2 114.4 111.6 100 100 10.1 12.0 13.0 10.9 9.7 9.6 7.8 50 9.6 50 64.8 61.6 56.0 54.4 54.4 51.9 52.8 45.4 0 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 South America Total Group EUR million EUR million 250 250 17.9 16.7 15.3 13.7 15.1 12.6 200 200 14.7 15.4 150 150 217.2 208.4 100 100 198.4 196.4 195.6 195.9 191.5 188.4 50 50 23.6 22.2 20.2 20.2 19.5 17.0 16.7 12.7 0 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 February 12, 2015 PKC Investor Presentation Q4 2014 5
Average Number of Personnel Europe North America 25,000 25,000 20,000 20,000 15,000 15,000 12,151 11,617 11,051 11,126 11,081 11,507 12,265 12,212 10,000 10,000 233 233 5,000 242 5,000 245 302 236 417 266 5,131 5,362 4,769 4,508 4,404 4,676 4,661 4,305 0 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 South America Total Group 25,000 25,000 631 583 20,000 20,000 745 664 652 620 616 647 15,000 15,000 10,000 10,000 19,526 19,501 18,589 18,921 18,659 19,004 20,136 20,164 3,335 5,000 3,035 3,076 5,000 2,964 2,838 2,766 2,668 2,520 0 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 February 12, 2015 PKC Investor Presentation Q4 2014 6
Net Working Capital % EUR million 250 16 81.0 83.2 66.9 82.0 200 14 81.6 78.2 63.5 26.2 87.8 92.1 83.4 150 87.7 12 80.4 82.2 80.2 79.4 100 10 112.9 112.3 109.0 106.1 105.7 50 102.8 8 92.7 89.0 0 6 -86.3 -88.4 -88.7 -87.0 -90.8 -94.8 -50 -95.9 -98.3 4 -17.6 -20.5 -100 -23.4 -20.7 2 -26.6 -25.3 -32.9 -44.0 -150 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Inventories Trade receivables Trade payables Other liabilities and receivables*** NWC* % of Revenue** *** Related to employee benefits, taxes and financial * Average of previous four quarters ** Revenue of previous 12 months items. Since Q3/14 includes additional tax liability of EUR 8.3 million and non-recurring items booked, but not paid. February 12, 2015 PKC Investor Presentation Q4 2014 7
Cash Flow EUR million 100 76.0 80 63.7 60 41.0 39.7 40 24.9 20.7 20 0 -12.3 -20 -14.8 -20.3 -40 2012 2013 2014 Cash from operations Capital expenditure Free cash flow February 12, 2015 PKC Investor Presentation Q4 2014 8
Balance Sheet and Returns % % 100 45 42.7 90 80 70 40 60 50 34.4 40 34.7 35 33.9 30 20 10 -1.1 0 30 2012 2013 2014 2012 2013 2014 -10 -5.6 Equity ratio, % Gearing, % % EUR million 100 2.4 20 16.7 15.1 14.7 90 15 2.0 80 7.8 10 5.3 70 1.6 5 60 1.2 50 0 0.7 40 0.8 -5 30 56.6 -10 0.4 20 0.0 -15 10 0.0 -0.3 0 -16.5 -20 -2.2 -8.9 2012 2013 2014 2012 2013 2014 -10 -0.4 Net debt Net debt to EBITDA* ROE, % ROI, % *EBITDA of previous 12 months February 12, 2015 PKC Investor Presentation Q4 2014 9
Wiring Systems Segment, Q4/2014 Revenue EUR million • 230 With constant FX rates revenue 217.2 220 decreased 6% from comparison period 208.4 210 and 3% from previous quarter 198.4 196.4 195.9 195.6 200 – European and South American truck 191.5 188.4 190 production volumes clearly lower – 180 Light-vehicle build-outs reduced revenue in North America 170 2013 2014 – In Europe, the revenue has also been impacted by changes in the product Q1 Q2 Q3 Q4 portfolio Adjusted EBITDA EUR million • 25 Adjusted EBITDA down from previous Illustrated net of non-recurring items 20.2 quarter and comparison period 18.5 20 16.6 15.2 15.2 – Additional expenses in North America to 13.0 15 12.0 11.2 meet increased demand of trucks 10 – Losses continued in Brazil 5 – Reorganisation and program transfers in Europe 0 2013 2014 Q1 Q2 Q3 Q4 February 12, 2015 PKC Investor Presentation Q4 2014 10
PKC Market Share 1-12/2014 North America Europe Brazil APAC 1% 36% Heavy 42% 42% Duty 58% 58% 64% Trucks 99% 2% 0% 23% Medium 34% Duty 66% Trucks 100 77% 98% % Source: PKC Group, ACT Build History January 2015, LMC Automotive forecasting Q4/2014. Note: Europe comprised of EU27 + Efta February 12, 2015 PKC Investor Presentation Q4 2014 11
EU27+ EFTA Truck Production units EURO 6 450,000 400,000 350,000 +5% -8% 300,000 250,000 200,000 150,000 100,000 -18% +3% 50,000 0 2013 2014 2015 2016 2017 2018 Heavy Duty Trucks Medium Duty Trucks Source: LMC Automotive forecasting Q4/2014 • Transition to Euro 6 emission standard at the beginning of 2014 has kept the demand of trucks below that of previous year, especially in the fourth quarter • The economic environment especially in the southern parts of Europe has suppressed truck demand PKC estimates production volume to remain on previous year’s level at the most February 12, 2015 PKC Investor Presentation Q4 2014 12
North America Production units EPA 2014 400,000 +14% 350,000 +21% 300,000 250,000 +11% -3% 200,000 150,000 100,000 50,000 0 2013 2014 2015 2016 2017 2018 Heavy Duty Trucks Medium Duty Trucks Source: LMC Automotive forecasting Q4/2014 units 10,000,000 • The conditions continue to be favourable for healthy truck demand in +8% +1% 9,000,000 North America • The growth is related both to replacement and expansion sales 8,000,000 7,000,000 2013 2014 2015 2016 2017 2018 Light Vehicle (Pick-up and SUV) February 12, 2015 PKC Investor Presentation Q4 2014 13
Brazil Truck Production units 160,000 140,000 -13% +1% 120,000 100,000 80,000 60,000 +6% -13% 40,000 20,000 0 2013 2014 2015 2016 2017 2018 Heavy Duty Trucks Medium Duty Trucks Source: LMC Automotive forecasting Q4/2014 • In Brazil the current economic situation and reduced governmental incentives have had a negative impact on the demand for trucks • Increased volatility and additional customer shut-downs taking place within the industry PKC estimates production volume to be lower than previous year February 12, 2015 PKC Investor Presentation Q4 2014 14
Electronics Segment, Q4/2014 Revenue EUR million • 20 17.9 Revenue decreased 8% from 16.7 15.3 15.4 15.1 14.7 comparison period 13.7 15 12.6 • Due to lower and more volatile 10 revenue the profitability was lower 5 than in the comparison period 0 2013 2014 Q1 Q2 Q3 Q4 Adjusted EBITDA EUR million 2.5 Illustrated net of non-recurring items 2.1 2.0 1.7 1.5 1.5 1.2 1.2 0.8 1.0 0.6 0.5 0.2 0.0 2013 2014 Q1 Q2 Q3 Q4 February 12, 2015 PKC Investor Presentation Q4 2014 15
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