PKC Group Oyj Investor Presentation Financial Year 2010 February 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 6,473 employees*) globally at the end of 2010 • The Group’s net sales amounted to EUR 316.1 million in 1-12/2010 • PKC Group Oyj is listed in NASDAQ OMX Helsinki Ltd. *) rented employees included 2 2
Outstanding Growth Track Record Through Focused Investments � PK Cables listed in � Acquisition of � Acquisition of � Acquisition of North � Acquisition of Polish the Helsinki Stock Estonian operations Russian operations American operations Exchange operations 1997 1998 2000 2002 2003 2004 2006 2007 2008 2009 2010 � Brazilian factory � Electronics business � Electronics � Wiring Harnesses was opened established as operations started in business � Acquisition of separate subgroup China established as electronics 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
PKC Group’s Locations Kempele (HQ) Kempele (HQ) Kostomuksha Raahe Kostomuksha Raahe Keila & Haapsalu Keila & Haapsalu Starachowice Starachowice Green Valley Green Valley Nogales Nogales Suzhou Suzhou Curitiba Curitiba Wiring Harnesses São Bento do Sul Electronics São Bento do Sul Office 4 4
Business Segments PKC Group operates in two core business segments: Wiring Harnesses, ~75% of the net sales The Wiring Harnesses business develops and manufactures wiring harnesses and cabling for automotive, telecommunications, and electronics industries Electronics, ~25% of the net sales The Electronics business provides design and contract manufacturing services for the telecommunications, electronics, and automotive industries 5 5
Proven and Tested Group Strategy Mission Vision Values � Commitment � Offer customers the best service � Provider of flexible and high quality solutions in close cooperation with � Generate economic value add for customers � Quality shareholders � Customer-oriented, � Profitability � Offer employees a rewarding job proactive contract manufacturer with ongoing development and R&D partner � Cooperation � Competitive pricing Strategic Objectives • Increase profitability by deepening existing customer relationships and acquiring new customers • Highest customer satisfaction by providing competitive, high quality products and global services • Ensuring competitiveness through multi-skilled, committed personnel and continuous development 6
PKC’s Financial Drivers and Targets for 2011-2013 � Volume rebound Annual Top � Potential acquisitions Line Growth of 10- 40% � New product initiatives and business wins � Reduced operative expenses by production relocations Gross Margin � Raw material and component cost reductions of 28-29% � Reduced SG&A expenses through reorganization and Operating Income Margin relocation of 9-13% � Effective capital usage ROIC of 30% 7 7
1-12/2010 Highlights Net Sales and Operating Profit Financial Items, Tax Items and EPS � Net sales amounted to EUR 316.1 million � Financial items amounted to EUR -4.7 million (0.4 (201.8 million), up 56.6% compared to 1-12/09. million). � Depreciation amounted to EUR 10.7 million � In addition to EUR 2.0 million interest expenses, a (11.0 million). translation loss of EUR 1.0 million related to the � Consolidated comparable EBITDA before non- translation of subsidiaries’ financial statements as recurring items was 42.2 EUR million (16.1 million). well as exchange rate losses caused mainly of � Operating profit totalled EUR 29.7 million Group’s internal liabilities totalling EUR 1.8 million (0.7 million), accounting for 9.4% (0.3%) of net have been entered into the financial items. sales. � Profit for the financial year totalled EUR 19.7 � The result is burdened by non-recurring expenses million (2.3 million). of EUR 1.8 million (4.3 million). � Earnings per share were EUR 1.09 (0.13). � Comparable operating profit without non-recurring expenses totalled EUR 31.5 million (5.1 million), Cash Flows, Gearing, ROI and Net Debt accounting for 10.0% (2.5%) of net sales. � Cash flows after investments were EUR 14.9 million (37.6 million). � Gearing was -1.7% (35.9%) � ROI 25.8% (6.4%) � Net debt were EUR -2.1 million (28.2 million). 8
Key Figures, 1-12/10 1-12/10 1-12/09 Change % Net sales (EUR 1,000) 316,081 201,814 56.6 EBIT (EUR 1,000) 29,689 682 4253.2 % of net sales 9.4 0.3 Net result (EUR 1,000) 19,683 2,349 737.9 EPS, (EUR) 1.09 0.13 738.5 ROI, % 25.8 6.4 Net debt (EUR million) -2.1 28.2 Gearing, % -1.7 35.9 No. of employees at closing 1) 5,765 4,077 41.4 1) Rented employees not included 9
Key Figures, 10-12/10 10-12/10 10-12/09 Change % 1-12/09 Net sales (EUR 1,000) 91,940 55,390 66.0 201,814 EBIT (EUR 1,000) 9,776 2,632 271.4 682 % of net sales 10.6 4.8 0.3 Net result (EUR 1,000) 5,272 3,245 62.5 2,349 EPS, (EUR) 0.29 0.18 61.1 0.13 Net debt (EUR million) -2.1 28.2 28.2 Gearing, % -1.7 35.9 35.9 No. of employees at closing 1) 5,765 4,077 41.4 4,077 1) Rented employees not included 10
Cost Savings, 1-12/10 1-12/10 1-12/09 Change % Net sales 316,081 201,814 56.6 Staff expenses 66,442 53,384 24.5 Other operating expenses 28,906 23,355 23.8 Non-recurring expenses -1,810 -4,300 Operating expenses excluding one time expenses 93,538 72,439 29.1 11
Key Figures, 1-12/10 Net Sales by Geographical Areas 6,473 Employees in total incl. rented at the end of Q4 EUR, million 350.0 1,600 1,412 1,378 1,400 300.0 30.1 1,222 1,135 1,200 57.0 250.0 20.7 1,000 200.0 16.0 800 26.5 622 150.0 18.9 600 154.6 453 100.0 99.9 400 251 50.0 200 53.7 40.5 0.0 0 1-12/2009 1-12/2010 China Finland North Russia Estonia Brazil Poland America Finland Other Europe North America South America Other countires Personnel excluding rented employees R&D Personnel +41.4% 120 114 7,000 110 101 5,765 6,000 5,625 100 5,311 90 4,775 5,000 80 4,077 4,000 3,570 60 3,000 40 2,000 20 1,000 0 0 2005 2006 2007 2008 2009 2010 2007 2008 2009 2010 12
Key Figures, 1-12/10 Net Sales Adjusted Operating Profit EUR, million Illustrated net of non-recurring items, EUR million 100 91.9 MAN 88.6 12 11.1 85.1 acquisition 10.5 82.3 81.0 9.9 9.3 80 10 73.4 64.7 7.6 8 60.8 60 55.4 53.8 6 6 46.8 45.8 3.8 3.7 3.4 4 40 1.9 2 0.4 20 0 -1.1 -2 0 2008 2009 2010 2008 2009 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Earnings per Share (EPS) Adjusted EBITDA % and EBIT % Illustrated net of non-recurring items, % EUR 18 0.8 16 0.56 0.6 14 0.41 0.39 0.4 0.30 0.29 12 0.26 0.25 0.24 0.24 0.19 0.19 0.17 0.2 10 0.01 8 0 6 -0.2 -0.20 4 -0.25 -0.4 2 -0.6 -0.53 0 2007 2008 2009 2010 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Q1 Q2 Q3 Q4 EBITDA % Operating profit % 13
Key Figures, 1-12/10 Investments Cash Flows after investments EUR, million EUR, million 37.6 40 35 35 30 30 25 25 21.6 20 20 14.9 15 15 10 10 5 5 9.9 0 8.0 4.8 -5 0 -6.2 2008 2009 2010 -10 2008 2009 2010 Net Investments Acquisition Return on Investment ROI,% R&D Expenditures % EUR, million 30 5.85 25.8 5.8 5.8 25 5.75 20.8 5.7 5.7 20 5.65 15 5.6 5.55 10 5.5 5.5 6.4 5.45 5 5.4 0 5.35 2008 2009 2010 2008 2009 2010 14
Wiring Harnesses Business Segment 15 15
Key Customer Segments Business Description Customer Segments • The wiring harnesses business segment develops • WH for Trucks & and manufactures wiring harnesses for the Buses commercial vehicle, telecommunication and • Engine Harnesses electronics industries • WH for Recreational • Service concept comprises cost-effective contract Products manufacturing and expert product development and design services. Provision of full supply chain • WH for Agricultural, management for customers with sourcing, Forestry and procurement, manufacturing and sequence Construction deliveries on global basis Equipment • Wiring of Electronics 16
Product Portfolio Overview Vehicle Harnesses Wiring of Electronics • Vehicle wiring harnesses are used in demanding • Wiring harnesses and wiring of electronics for conditions medical, telecommunication and automation industries • The wiring harnesses business develops and manufacturers high-quality, reliable and cost- efficient products tailored to the customers requirements Batch harnesses Chassis harnesses Engine harnesses Instrument harnesses 17
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