INVESTOR PRESENTATION Q3 2014 - PKC Group2013 2014 Q1 Q2 Q3 Q4 18.5 12.0 20.2 13.0 16.6 15.2 15.2 0...
Transcript of INVESTOR PRESENTATION Q3 2014 - PKC Group2013 2014 Q1 Q2 Q3 Q4 18.5 12.0 20.2 13.0 16.6 15.2 15.2 0...
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INVESTOR PRESENTATION Q3 2014:
October 30, 2014
Matti Hyytiäinen, President & CEO
REVENUE AND COMPARABLE EBITDA IMPROVED FROM PREVIOUS QUARTER
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PKC’s Operations
• Utilization rates improved in North America
• Development program progressing in Europe
and South America
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Business Environment
Q3/2014 Highlights
• Heavy and medium duty truck production
decreased from previous year in Europe and
South America
• North American heavy duty truck production
increased from previous year driven by
healthy truck demand
PKC’s Financial Performance
• Revenue and comparable EBITDA improved
from previous quarter
• Cash flow from operations positive EUR 6.5
million in the third quarter
PKC Investor Presentation Q3 2014
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Maximizing current PKC set-up
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Strategy 2018 Update
• Nogales (Mexico), Sosnowiec (Poland),
Haapsalu (Estonia) and Itajuba (Brazil)
factories are to be 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
PKC Investor Presentation Q3 2014
Penetrating into APAC
• Awards received for design and manufacturing
of multiple programs in China which are to
ramped up during 2015
• Quotation activities are increasing in China
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4
Key Figures
PKC Investor Presentation Q3 2014
1) Excluding PPA depreciation and amortisation and non-recurring asset impairment and write-downs2) Q3/14 includes additional tax liability of EUR 8.3 million
EUR million 7-9/14 7-9/13 Change % 1-9/14 1-9/13 Change % 2013
Revenue 210.7 211.6 -0.5 620.7 671.9 -7.6 884.0
EBITDA1) 15.2 17.0 -10.8 39.7 56.4 -29.6 70.3
EBITDA1) % 7.2 8.0 6.4 8.4 8.0
Non-recurring items -12.4 -1.7 633.4 -16.6 -8.3 99.1 -10.4
Operating profit -4.0 7.9 -151.1 3.0 25.9 -88.6 30.5
Diluted EPS (EUR) -0.73 0.14 -629.8 -0.58 0.55 -205.1 0.62
Cash flow from operations 6.5 8.4 -22.2 6.6 16.8 -60.5 39.7
Gross capital expenditure 4.4 3.6 21.7 16.0 10.5 52.3 14.6
Net working capital2) 66.9 82.1 -18.5 66.9 82.1 -18.5 63.5
Total assets 466.0 503.1 -7.4 466.0 503.1 -7.4 455.6
Gearing, % 12.9 9.0 12.9 9.0 -1.1
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Revenue
PKC Investor Presentation Q3 2014 5
128.9 130.7 120.2 111.6 114.4 120.7129.7
0
50
100
150
200
250
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14
North America Europe
EUR million EUR million
South America
EUR million
Total Group
EUR million
56.0 61.6 54.4 64.8 54.4 51.9 45.4
13.0 12.0 10.910.1
9.7 9.6 9.6
0
50
100
150
200
250
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14
22.2 23.6 20.2 20.2 17.0 16.7 19.50
50
100
150
200
250
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14
208.4 217.2 196.4 198.4 188.4 191.5 195.6
16.717.9
15.3 13.7 15.4 14.7 15.1
0
50
100
150
200
250
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14
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Average Number of Personnel
PKC Investor Presentation Q3 2014 6
12,151 11,617 11,051 11,126 11,081 11,507 12,265
0
5,000
10,000
15,000
20,000
25,000
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14
North America Europe
South America Total Group
4,305 4,508 4,404 4,769 4,676 4,661 5,131417 302 266 245 236 242 233
0
5,000
10,000
15,000
20,000
25,000
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14
3,035 3,335 3,076 2,964 2,838 2,766 2,6680
5,000
10,000
15,000
20,000
25,000
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14
19,526 19,501 18,589 18,921 18,659 19,004 20,136
745 664647 620 616 652
631
0
5,000
10,000
15,000
20,000
25,000
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14
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Net Working Capital
7
84.6109.0 112.9 106.1 92.7 105.7 102.8 112.3
87.5
92.1 87.8 87.780.2
80.4 82.2 83.4
-75.5 -94.8 -90.8 -88.4 -88.7 -87,0 -86.3 -95.9
-23.8-25.3 -26.6 -23.4 -20.7
-17.6 -20.5-32.9
0
2
4
6
8
10
12
14
16
-150
-100
-50
0
50
100
150
200
250
Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14
Trade receivables Inventories
Trade payables Other liabilities and receivables***
NWC* % of Revenue**
81.0 83.2
72.782.0
63.5 81.6 78.266.9
EUR million %
* Average of previous four quarters ** Revenue of previous 12 months
PKC Investor Presentation Q3 2014
*** related to employee benefits, taxes and financial items,
Q3/14 includes additional tax liability of EUR 8.3 million
Inventories Trade receivables
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Cash Flow
39.7
16.8
6.6
-14.8
-10.3
-16.7
24.9
6.4
-10.0
-20
-10
0
10
20
30
40
50
2013 1-9/13 1-9/14
Cash from operations Capital expenditure Free cash flow
8
EUR million
PKC Investor Presentation Q3 2014
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-2.2
17.8
22.8
0.0
0.3
0.6
-0.4
0.0
0.4
0.8
1.2
1.6
2.0
2.4
-10
0
10
20
30
40
50
60
70
80
90
100
2013 Q3/13 Q3/14
Net debt Net debt to EBITDA*
Balance Sheet and Returns
9
42.7
39.1
38.0
35
36
37
38
39
40
41
42
43
44
2013 Q3/13 Q3/14
Equity ratio, %
-1.1
9.0 12.9
-10
0
10
20
30
40
50
60
70
80
90
100
2013 Q3/13 Q3/14
Gearing, %
7.8 9.0
-10.1
14.7 15.2
7.3
-15
-10
-5
0
5
10
15
20
2013 Q3/13 Q3/14
ROE, % ROI, %
% %
EUR million %
PKC Investor Presentation Q3 2014*EBITDA of previous 12 months
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Wiring Systems Segment, Q3/2014
• Revenue increased 2% from previous
quarter and remained at the same level
as previous year
– No FX conversion impact in Q3
– Light-vehicle build-outs reduced revenue in
North America
– In Europe, the revenue has also been
impacted by changes in the product
portfolio
• Adjusted EBITDA increased from
previous quarter, but decreased from
previous year level
– Losses continued in Brazil, however at a
lower level than in Q2
– Fluctuating utilization rates
– Reorganisation and program transfers in
Europe
208.4
188.4
217.2
191.5
196.4 195.6198.4
170
180
190
200
210
220
2013 2014
Q1 Q2 Q3 Q4
18.5
12.0
20.2
13.0
16.615.215.2
0
5
10
15
20
25
2013 2014
Q1 Q2 Q3 Q4
RevenueEUR million
Adjusted EBITDAEUR million
Illustrated net of non-recurring items
PKC Investor Presentation Q3 2014
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PKC Market Share 1-9/2014
58%
42%
North America BrazilEurope
Medium
Duty
Trucks
Heavy
Duty
Trucks
PKC
OtherSource: PKC Group, ACT Build History October 2014, LMC Automotive forecasting Q3/2014. Note: Europe comprised of EU27 + Efta
APAC
PKC Investor Presentation Q3 2014 11
21%
79%
35%
65%
40%
60%
36%
64%
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EU27+ EFTA Truck Production
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
1-9/2013 1-9/2014 2013 2014 2015 2016 2017 2018
Heavy Duty Trucks Medium Duty Trucks
• Transition to Euro 6 emission standard at the beginning of 2014 has kept the
demand of trucks below the level of previous year
• The economic environment especially in the southern parts of Europe has
suppressed truck demand
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units
Source: LMC Automotive forecasting Q3/2014
EURO 6
-1%
-15%
-8%
-18%
PKC Investor Presentation Q3 2014
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North America Production
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
1-9/2013 1-9/2014 2013 2014 2015 2016 2017 2018
Heavy Duty Trucks Medium Duty Trucks
+18%
+20%
+2%
+5%
• The conditions have remained favourable
for healthy truck demand in North
America
• The transportation companies continue to
enjoy a good profit environment and
buying plans remain elevated
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units
Source: LMC Automotive forecasting Q3/2014
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
1-9/13 1-9/14 2013 2014 2015 2016 2017 2018
+9%
+7%
Light Vehicle (Pick-up and SUV)
PKC Investor Presentation Q3 2014
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Brazil Truck Production
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
1-9/2013 1-9/2014 2013 2014 2015 2016 2017 2018
Heavy Duty Trucks Medium Duty Trucks
-12%
-14%-17%
-18%
• In Brazil the current economic situation has had a negative impact on the demand
for trucks
• In third quarter there was seasonal growth of truck production in comparison to
the second quarter
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units
Source: LMC Automotive forecasting Q3/2014
PKC Investor Presentation Q3 2014
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Electronics Segment, Q3/2014
• Revenue increased 3% from previous
quarter and decreased 1% year-on-
year
• Due to seasonalities and different
sales mix the profitability was lower
than in the comparison period even
though the cost structure has improved
due to measures implemented during
2013
16.715.4
17.9
14.715.3 15.113.7
0
5
10
15
20
2013 2014
Q1 Q2 Q3 Q4
1.5
1.2
2.1
0.8
1.7
1.2
0.6
0.0
0.5
1.0
1.5
2.0
2.5
2013 2014Q1 Q2 Q3 Q4
EUR million
EUR million
Illustrated net of non-recurring items
Adjusted EBITDA
Revenue
Market Outlook – Full Year 2014
• The market demand for Electronics
segment’s products is expected to
remain at the present level
PKC Investor Presentation Q3 2014
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Market Outlook – Full Year 2014
• European heavy duty truck
production is estimated to decrease
by 8% and medium duty truck
production by 18% compared to
2013.
• North American heavy duty truck
production is estimated to increase
by 20% and medium duty truck
production by 2% compared to
2013.
• Brazilian heavy duty truck
production is estimated to decrease
by 12% and medium duty truck
production by 14% compared to
2013.
16PKC Investor Presentation Q3 2014
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PKC Group’s Outlook
• PKC Group estimates that 2014
revenue and comparable EBITDA will
be lower than in 2013.
• Revenue estimate is based on
current business structure. Revenue
will be affected by light vehicle build-
outs in North America and by
changes in exchange rates.
• Comparable EBITDA in 2014 will
also be affected by reorganisation
and program transfers in Europe and
expenditures related to the
implementation of PKC’s growth
strategy.
• In 2013, PKC’s revenue was EUR 884.0 million and
comparable EBITDA before non-recurring items was
EUR 70.3 million
PKC Investor Presentation Q3 2014 17
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PKC’s Strategy Captures Growth
Opportunities
18PKC Investor Presentation Q3 2014
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PKC Group Plc
Unioninkatu 20-22
FI-00130 Helsinki, Finland
www.pkcgroup.com