investor presentation q2 2013 - pkcgroup.com · pkc investor presentation q2 2013. revenue 5 242.0...

INVESTOR PRESENTATION Q2 2013August 8, 2013

Matti Hyytiäinen, President & CEO

PKC’s Operations

• Number of PKC Technology Days were organized to current and potential customers.

• Electronics Russian operations were ended.

2

Business Environment

Q2/2013 Highlights

• Truck production volumes improved from first quarter in Europe, North America and Brazil.

• Electronics’ demand remained unchanged.

PKC’s Financial Performance• Revenue and EBITDA improved from the

previous quarter.• Break-even cash flow, higher NWC due to

higher sales compared to Q4/12 and Q1/13.• NRIs mainly in Electronics and Brazil.

PKC Investor Presentation Q2 2013

3

Key Figures, 4-6/2013

EUR million 4-6/13 4-6/12 Change % 1-12/12

Revenue 235.1 244.8 -4.0 928.2

EBITDA 20.6 22.9 -10.0 83.0

Depreciation and amortisation1) 4.5 3.7 21.7 17.6

EBITA 16.1 19.2 -16.1 65.4

PPA depreciation and amortisation 2.8 4.0 -29.2 13.9

Operating profit 13.3 15.2 -12.7 51.5

Non-recurring items 1.3 1.0 24.3 8.0

Operating profit after non-recurring items 12.0 14.2 -15.4 43.5

Financial items -2.6 -0.2 -8.5

Taxes -3.3 -4.3 -21.9 -10.9

Net profit 6.0 9.7 -37.9 24.0

EPS (EUR) 0.28 0.46 -39.1 1.121) Excluding PPA depreciation and amortisation and non-recurring asset impairment and write-downs


4

Key Figures, 1-6/2013

EUR million 1-6/13 1-6/12 Change % 1-12/12

Revenue 460.3 486.8 -5.4 928.2

EBITDA 39.4 43.2 -9.0 83.0

Depreciation and amortisation1) 9.1 7.9 14.3 17.6

EBITA 30.3 35.3 -14.2 65.4

PPA depreciation and amortisation 5.7 7.1 -19.6 13.9

Operating profit 24.6 28.2 -12.8 51.5

Non-recurring items 6.7 1.3 420.3 8.0

Operating profit after non-recurring items 17.9 26.9 -33.4 43.5

Financial items -3.8 -2.4 57.1 -8.5

Taxes -4.9 -7.8 -37.1 -10.9

Net profit 9.2 16.6 -45.0 24.0

EPS (EUR) 0.42 0.78 -46.2 1.121) Excluding PPA depreciation and amortisation and non-recurring asset impairment and write-downs


Revenue

5

242.0

225.2

244.8

235.1

227.4

214.0

180

200

220

240

260

2012 2013

Q1 Q2 Q3 Q4

EUR million


Geographical Split

55.6 %

26.2 %

10.0 %0.6 %

5.1 %

0.1 %2.4 %

0%

10%

20%

30%

40%

50%

60%

NorthAmerica

Europe SouthAmerica

APAC

Revenue 4-6/2013

Wiring Systems Electronics

130.8 EUR million

73.6

23.8

6.9

6

57.6 %

22.4 %16.5 %

0.2 %

1.5 %

1.8 %0%

10%

20%

30%

40%

50%

60%

70%

NorthAmerica

Europe SouthAmerica

APAC

Average Number of Personnel4-6/2013

Wiring Systems Electronics

11,617

4,810

3,335

404

Temporary employees included


Profitability

20.422.9 22.5

17.218.8

20.6

16.219.2 17.9

12.214.2

16.1

8.49.4

9.9

8.0 8.38.8

6.7

7.8 7.9

5.76.3

6.8

0

2

4

6

8

10

12

0

2

4

6

8

10

12

14

16

18

20

22

24

Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13

EBITDA (adjusted*) EBITA (adjusted**) EBITDA* % EBITA** %

7

EUR million %

* excluding non-recurring items in EBITDA ** excluding non-recurring items and PPA depreciation and amortisation in operating profit


Earnings, Cash Flow and Dividend per Share

8

1.16 1.12

0.78

0.42

1.46

2.97

1.33

0.06

0.60 0.70

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2011 2012 1-6/12 1-6/13

Earnings per shareFree cash flow (excl. acquisitions) per shareDividend per share

EUR


Net Working Capital

9

104.0 104.1 112.7 104.5 84.6 109.0 112.9

110.5 108.4 97.6 92.187.5

92.1 87.8

-90.8 -101.6 -91.3 -90.6 -75.5 -94.8 -90.8

-23.0 -20.3 -22.1 -23.2-23.8

-25.3 -26.6

-15

-10

-5

0

5

10

15

20

25

-150

-100

-50

0

50

100

150

200

250

Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13

Trade receivables InventoriesTrade payables Other liabilities and receivables***NWC* % of Revenue**

100.7 96.990.7 82.772.7

83.281.0

EUR million %

* Average of previous four quarters ** Revenue of previous 12 months


*** related to employee benefits, taxes and financial items

Inventories Trade receivables

Cash Flow

40.0

76.0

35.3

8.3

-90.2

-12.3 -7.0 -7.0

-50.2

63.7

28.3

1.3

-100

-80

-60

-40

-20

0

20

40

60

80

100

2011 2012 1-6/12 1-6/13

Cash from operations Capital expenditure Free cash flow

10

EUR million


110.7

56.6

93.4

69.8

2.1

0.7

1.3

1.0

0.0

0.4

0.8

1.2

1.6

2.0

2.4

0

20

40

60

80

100

120

2011 2012 Q2/12 Q2/13

Net debt Net debt to EBITDA*

Balance Sheet and Returns

11

30.0

33.9

31.2

34.5

272829303132333435

2011 2012 Q2/12 Q2/13

Equity ratio, %

72.6

34.4

57.9

45.2

01020304050607080

2011 2012 Q2/12 Q2/13

Gearing, %

17.015.1

21.2

11.5

18.916.7

23.0

18.0

0

5

10

15

20

25

30

2011 2012 1-6/12 1-6/13

ROE, % ROI, %

% %

EUR million %

PKC Investor Presentation Q2 2013*EBITDA of previous 12 months

12

Wiring Systems Segment, Q2/2013

• Revenue increased 4% from previous quarter, but was down 4% from previous year

• Stronger Peso was largely offset by decreased copper price

• Relocations of production were implemented, and shutdowns of the Ukraine and Ireland factories continued as planned

• Measures to improve profitability in Brazil are being intensified

226.6

208.4

226.8

217.2

209.2

196.1

180

190

200

210

220

230

2012 2013Q1 Q2 Q3 Q4

15.2

11.7

15.413.314.2

8.7

0

5

10

15

20

2012 2013Q1 Q2 Q3 Q4

RevenueEUR million

Adjusted Operating ProfitEUR million Illustrated net of non-recurring items


Global Leader Position as a Target

• Current business relationship with all key western OEMs in commercial vehicle industry enable future growth

• Global leader position as a target

59%41%

34%

66%

32%

68%

2%

98%

38%62%

16%

84%

North America BrazilEurope

Medium Commercial

Vehicle

HeavyCommercial

Vehicle

PKCOther

Source: ACT Build History July 2013, LMC Automotive forecasting Q2/2013. Note: Europe comprised of EU27 + Efta

1%

99%

APAC

0%

100%

PKC Investor Presentation Q2 2013 13

EU27+ EFTA Truck Production

050,000

100,000150,000200,000250,000300,000350,000400,000450,000500,000

H1/2012 H1/2013 2012 2013 2014 2015 2016 2017 2018

Heavy Trucks Medium Trucks

• Q2/13 production volumes increased from Q1/13: heavy duty by +2% and medium duty by +3%

• Full year 2013 forecast has been increased, but is still down by about -6% from 2012 (previous forecast -10%)

• Due to upcoming Euro 6 standard volumes are estimated to increase in Q4/13

units

Source: LMC Automotive forecasting Q2/2013

EURO 6

-11%

-11%

-6%

-6%


North America Truck & LCV Production

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

H1/2012 H1/2013 2012 2013 2014 2015 2016 2017 2018Heavy Trucks Medium Trucks

-22%

-6%

+7%

-3%

• Heavy duty truck production volume was up +21% from previous quarter, but down by -15% year-on-year

• Full year heavy duty production estimate is down by -6%, medium duty up by +7%

• Stable improvement in LCV production volumes

units


EPA 2014

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

H1/12 H1/13 2012 2013 2014 2015 2016 2017 2018

+4%

+5%

Light Commercial Vehicle (Pick-up and SUV)PKC Investor Presentation Q2 2013 15

Brazil Truck Production

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

H1/2012 H1/2013 2012 2013 2014 2015 2016 2017 2018

Heavy Trucks Medium Trucks

+21%

+54%

+57%

+20%

• Heavy duty truck production volume was up 11% from previous quarter and 26% year-on-year

• The governmental incentive program to support truck sales is currently valid until the end of year 2013

• Average fleet age continues to be very high

units


EURO 5 (Brazil)


Market Outlook – Full Year 2013

• European truck production is estimated to decrease by about 6% compared to 2012.

• North American heavy duty truck production is estimated to decrease by 6% and medium duty truck production to increase 7%.

• Brazilian heavy duty truck production is estimated to increase by 21% and medium duty truck production by 54% compared to 2012.

• PKC’s market outlook is further impacted by some light vehicle and component programs that are near end-of-life-cycle and will be ramped-down in 2013.

17PKC Investor Presentation Q2 2013

18

Electronics Segment, Q2/2013

• Flat revenue year-on-year• Significantly improved profitability due

to on-going measures to improve cost competitiveness

• Chameleon tester products introduced15.3

16.7

18.0 17.918.3

17.8

13

14

15

16

17

18

19

2012 2013Q1 Q2 Q3 Q4

-0.9

1.00.7

1.71.4

1.0

-1.5

-1

-0.5

0

0.5

1

1.5

2

2012 2013

Q1 Q2 Q3 Q4

EUR million

EUR million

Illustrated net of non-recurring items

Adjusted EBIT

Revenue

Market Outlook – Full Year 2013

• The demand of industrial electronic appliances is estimated to remain at the previous level

• Volumes of renewable-energy and energy saving products including smart grid solutions are likely to increase

• Also the demand in telecommunications sector is expected to increase slightly


PKC Group’s Outlook

• PKC Group estimates its full year 2013 revenue to be lower than in 2012 and estimates its comparable operating profit excluding non-recurring items not to reach 2012 level.

• In 2012 PKC’s revenue was EUR 928.2 million and comparable operating profit excluding non-recurring items was EUR 51.5 million.


STRATEGIC INITIATIVES

PKC’s Strategy Captures Growth Opportunities

VISION 2020

PKC is the Preferred Supplier in Electrical Distribution Systems for Transportation Industry globally.

20

Managing the Complexity

Developing PKC Uniqueness further

Maximizing currentPKC set-up

Penetrating into APAC

Exploring opportunities

to expand within Transportation

Industry

Developing Electronics business as a stand alone within PKC Group


Long-Term Financial Targets

Annual Revenue EUR 1.4 Billion by 2018EBITDA > 10%Gearing < 75%

Dividends 30 – 60% of Free Cash Flow

Annual Revenue EUR 1.4 Billion by 2018EBITDA > 10%Gearing < 75%

Dividends 30 – 60% of Free Cash Flow

Developing PKC Uniqueness

further

Developing PKC Uniqueness

furtherMaximizing current

PKC set-upMaximizing current

PKC set-upPenetrating into

APACPenetrating into

APAC



Industry



Industry


PKC Group PlcUnioninkatu 20-22

FI-00130 Helsinki, Finland

www.pkcgroup.com

investor presentation q2 2013 - pkcgroup.com · pkc investor presentation q2 2013. revenue 5 242.0...

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