PKC Group Oyj Investor Presentation Q3/2011 November 2011 Harri Suutari President & CEO 1 1
PKC Group • PKC Group provides design and manufacturing services for wiring harnesses and electronics • The Group’s products and services are delivered mainly to the automotive, telecommunications and electronics industries • PKC Group employs 8,618 employees*) globally at the end of Q3/2011 • The Group’s net sales amounted to EUR 308.2 million in 1-9/2011 • PKC Group Oyj is listed in NASDAQ OMX Helsinki Ltd. *) rented employees included 2 2
Growth Through Focused Investments � PK Cables listed in � Acquisition of � Acquisition of � Acquisition of � Acquisition of MAN � Acquisition of SEGU in the Helsinki Stock Estonian production Russian production Electro Canada WH production Germany, Poland, Exchange in Poland Ukraine 1997 1998 2000 2002 2003 2004 2006 2007 2008 2009 2010 2011 � Electronics business � Electronics � Wiring Harnesses � Brazilian factory was � Acquisition of AEES opened established as operations started in business in North America, � Acquisition of electronics separate subgroup China established as Brazil and Ireland business separate subgroup Adj. EBITDA (1) EUR million Development Over Time 42,2 38,3 35,8 32,3 30,6 25,7 24,3 16,0 15,0 15,3 13,5 12,0 9,6 8,9 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (1) Illustrated net of non-recurring items 3 3
PKC locations today Acuna, Mexico Barchfeld, Germany Curitiba, Brazil Dallas, Texas Dundalk, Ireland Green Valley, Arizona Farmington Hills, Michigan Haapsalu, Estonia Itajuba, Brazil Jeffersontown, Kentucky Juarez, Mexico Keila, Estonia Kempele, Finland (HQ) Kirkland, Washington Kostomuksha, Russia Mukachewo, Ukraine Nogales, Mexico Piedras Negras, Mexico Portland, Oregon Raahe, Finland San Antonio, Texas São Bento do Sul, Brazil Sao Paolo, Brazil Sosnowiec, Poland Starachowice, Poland Suzhou, China 22,860 employees Torreon, Mexico Traverse City, Michigan 4 4
1-9/2011 Highlights Net Sales and Operating Profit Financial Items and EPS � Net sales amounted to EUR 308.2 million � Financial items amounted to EUR – 4.0 million (224.1 million), up 37.5% compared to 1-9/10. (-1.5 million). � Depreciation amounted to EUR 9.3 million � Financial items contain EUR 2.1 million interest (8.2 million). expenses, EUR 0.4 million interest income and � Consolidated comparable EBITDA before non- EUR 2.3 million net exchange rate loss. recurring items was EUR 38.9 million (29.8 million). � Profit for the report period totalled EUR 17.6 � Operating profit totalled EUR 25.7 million million (14.4 million). (19.9 million), accounting for 8.3% (8.9%) of net � Earnings per share were EUR 0.87 (0.81). sales. � During the report period were reported EUR 3.8 million (1.6 million) in non-recurring items. � Comparable operating profit without non-recurring items totalled EUR 29.6 million (21.6 million), Cash Flows, Gearing, ROI and Net Debt accounting for 9.6% (9.6%) of net sales. � Cash flows after investments were EUR -16.7 million (13.9 million). � Gearing was 109.2% (22.9%) � ROI 19.3% (27.3%) � Net debt were EUR 140.0 million (20.9 million). 5
Key Figures, 1-9/11 1-9/11 1-9/10 Change % 1-12/10 Net sales (EUR 1,000) 308,207 224,140 37.5 316,081 EBIT (EUR 1,000) 25,711 19,913 29.1 29,689 % of net sales 8.3 8.9 9.4 Net result (EUR 1,000) 17,582 14,411 22.0 19,683 EPS, (EUR) 0.87 0.81 7.4 1.09 ROI, % 19.3 27.3 25.8 Net debt (EUR million) 140.0 20.9 -2.1 Gearing, % 109.2 22.9 -1.7 No. of employees at closing 1) 7,937 5,701 39.2 5,977 1) Rented employees not included 6
Key Figures, 7-9/11 7-9/11 7-9/10 Change % 1-12/10 Net sales (EUR 1,000) 102,014 82,301 24.0 316,081 EBIT (EUR 1,000) 8,967 9,498 -5.6 29,689 % of net sales 8.8 11.5 9.4 Net result (EUR 1,000) 3,728 9,973 -62.6 19,683 EPS, (EUR) 0.19 0.56 -66.1 1.09 25.8 Net debt (EUR million) 140.0 20.9 -2.1 Gearing, % 109.2 22.9 -1.7 No. of employees at closing 1) 7,937 5,701 39.2 5,977 1) Rented employees not included 7
Non-recurring Items, 1-9/11 Unallocated Wiring amounts and (EUR 1,000) Harness Electronics eliminations Group total Donations to the universities 0 150 0 150 Advisor fees 2,354 0 1,656 4,010 Cancellation of the write-down of inventories -317 0 0 -317 Total non-recurring items 2,037 150 1,656 3,843 Estimate for the non-recurring items during Q4 2011 is ca. EUR 4.0 million 8
Key financials of AEES Expected growth in profitability Key financials � AEES has the past years successfully AEES GROUP, €m 7-9/2011 1-9/2011 1-12/2010 implemented a comprehensive rationalisation Profit and loss programme to enhance the company’s overall efficiency and competitiveness Net sales 131.9 397.6 454.0 � Costs related to the rationalisation programme EBITDA (excl. rationalisation costs) 9.6 23.0 14.7 have burdened the 2010 and 1-9/2011 % of net sales 7.3% 5.8% 3.2% profitability EBITDA (reported) 2.9 8.0 (4.8) % of net sales 2.2% 2.0% (1.1%) Balance sheet Fixed assets 25.6 25.6 25.7 Net working capital 48.5 48.5 37.4 Headcount 14,248 end of September 2011 Note: Financials as per US GAAP. USD/EUR exchange rate average for a given period. Balance sheet items converted at rate of the balance sheet date. 9 9
Key Figures, 1-9/11 Net Sales by Geographical Areas 8,618 Employees in total incl. rented at the end of Q3 EUR, million 350.0 15.1 300.0 2,500 2,250 50.7 250.0 2,000 19.4 1,804 15.4 200.0 42.6 1,500 1,304 16.6 1,155 150.0 176.3 1,000 831 100.0 111.4 391 500 324 50.0 278 281 46.8 38.2 0.0 0 a 1-9/2010 1-9/2011 y e a d a l a i d n c z n n n i s i n a i n a i i a r a a h s o m e r l u B l r C n m t o k s r i R U F P e E A Finland Other Europe North America South America Other countires G h t r o N Personnel excl. rented employees R&D Personnel at the end of report period 140 133 9,000 120 7,937 114 8,000 +32.8% 120 101 7,000 100 90 5,977 5,652 6,000 5,311 80 5,000 4,423 60 4,000 3,000 40 2,000 20 1,000 0 0 2007 2008 2009 2010 Q3/11 2007 2008 2009 2010 Q3/11 10
Key Figures, 1-9/11 Net Sales Adjusted Operating Profit EUR, million 120 Illustrated net of non-recurring items, EUR million Segu 109.3 MAN 12 acquisition 102.0 10.7 acquisition 10.5 96.9 10.0 9.9 100 91.9 10 8.9 82.3 81.0 7.6 8 80 60.8 6 55.4 60 53.8 3.8 46.8 45.8 3.4 4 40 1.9 2 0.4 20 0 -1.1 -2 0 2009 2010 2011 2009 2010 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Earnings per Share (EPS) Adjusted EBITDA % and EBIT % Illustrated net of non-recurring items, % EUR 18 0.70 16 0.56 0.60 0.50 14 0.39 0.38 0.40 12 0.31 0.29 0.24 0.30 10 0.19 0.19 0.20 8 0.10 0.01 6 0.00 4 -0.10 2 -0.20 -0.20 -0.30 -0.25 0 2009 2010 2011 97 99 01 03 05 07 09 Q3/11 Q1 Q2 Q3 Q4 EBITDA % Operating profit % 11
Key Figures, 1-9/11 Investments Cash Flows after investments EUR, million EUR, million 50 25 37.6 40 20 30 15 20 14.9 13.9 21.1 10 10 0 5 8.1 4.8 4.1 -10 0 2009 2010 Q3/2010 Q3/2011 -20 -16.7 2009 2010 Q3/2010 Q3/2011 Other Investments Acquisition Return on Investment ROI,% R&D Expenditures % EUR, million 30 27.3 6 5.7 5.5 25.8 25 4.8 5 4.1 19.3 20 4 15 3 10 2 6.4 5 1 0 0 2009 2010 Q3/2010 Q3/2011 2009 2010 Q3/2010 Q3/2011 12
Wiring Harnesses Business Segment 13 13
Key Customer Segments Business Description Customer Segments • The wiring harnesses business segment develops • Trucks & Buses and manufactures wire, wiring components, wiring • Light vehicles harnesses and cablings globally for the automotive and commercial vehicle industry • Engines • Recreational Products • Agricultural, Forestry and Construction Equipment 14
Unique customer portfolio Supplier to all the six leading Western truck OEM groups OEM Group 1 OEM Group 2 Competitor 1 Competitor 2 OEM Group 3 Competitor 3 OEM Group 4 Competitor 4 OEM Group 5 Competitor 5 OEM Group 6 Competitor 6 • Acquisition of AEES provides PKC with access to some of the leading truck OEM accounts in North America, i.e. Daimler Trucks, Navistar and PACCAR • Unique position achieved, as no other competitor supplies wiring harnesses to all of the six leading Western customer accounts Note: OEM groups in alphabetical order. Including both heavy and medium duty truck groups. 15 15
PKC-AEES Truck Market Share Globally North America Europe South America Heavy Trucks Medium Trucks Source: Truck Statistics: J.D. Power Automotive Forecasting, Q3 2011 , ACT Forecasting September 2011, Note: Europe comprised of EU27 + Efta, 16
Europe Heavy Truck Market >16t Source: ACT and PKC 17
Brazil Heavy Truck Market >16t Source: ACT N.A. Commercial Vehicle Outlook October 2011 18
North American Class 8 Market Source: ACT and PKC 19
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