PKC Group Oyj INTERIM REPORT 18 APRIL 2008 8.15 a.m.
PKC GROUP'S QUARTELY REPORT JANUARY-MARCH/2008
The PKC Group's net sales in the January-March period increased by 21.6% on the
previous year to EUR 85.1 million (70.0 million in Jan.-Mar. 2007). Operating
profit was EUR 9.3 million (6.5 million) and profit before taxes was EUR 7.3
million (6.1 million). Diluted earnings per share were EUR 0.26 (0.24).
HARRI SUUTARI, PRESIDENT AND CEO:
“The continued vigorous growth in our customer sectors contributed to the
excellent operational result in the early part of the year.
In order to maintain good profitability also in the long term, we need to carry
out measures for improving our cost-efficiency. These measures will boost our
competitiveness. Our new line organisation, which is based on our production
organisations, will increase management efficiency and considerably decrease
management and administrative costs. By speeding up our rationalisation measures
and carrying out production more efficiently, we will be able to cut our current
annual costs by about EUR 20 million in the coming three years.”
OPERATING ENVIRONMENT
The commercial vehicle market grew compared to the same period a year ago.
Deliveries by the Wiring Harnesses business to the commercial vehicle industry
in Europe and South America were at a high level. The deliveries of wiring
harnesses for other vehicles enjoyed a favourable trend. Sales of wiring
harnesses and cabling to the telecommunications and electronics industry have
grown considerably compared to the previous year.
Electronics contract design and manufacturing continued to exhibit strong growth
during the report period. Investments made by telecommunications customers led
to an increase in the volume of design services, and demand from the industrial
electronics sector also remained robust. Competition for new supply contracts
and customer relationships remains intense, requiring the adoption of
cost-efficient operating models and the ability to rapidly respond to customers'
global needs.
NET SALES AND FINANCIAL PERFORMANCE
January-March 2008
Consolidated net sales in January-March amounted to EUR 85.1 million (70.0
million), up 21.6% on the same period a year earlier. Consolidated operating
profit totalled EUR 9.3 million (6.5 million), accounting for 11.0% of net sales
(9.3%). Depreciation amounted to EUR 2.0 million (2.1 million). Financial income
and expenses were EUR 2.0 million negative (0.4 million negative). Profit before
taxes was EUR 7.3 million (6.1 million). Profit for the report period totalled
EUR 4.6 million (4.3 million). Diluted earnings per share were EUR 0.26 (0.24).
Net sales generated in the report period by the Wiring Harnesses business
amounted to EUR 69.3 million (58.1 million), or 19.3% more than in the
comparative period. The segment's share of consolidated net sales was 81.5%
(83.0%). It generated an operating profit of EUR 7.0 million (4.9 million),
equivalent to 10.1% of the segment's net sales (8.5%).
Net sales generated by the Electronics business grew 33.1% to EUR 15.8 million
(11.8 million). The segment's share of consolidated net sales was 18.5% (16.9%).
It generated an operating profit of EUR 2.3 million (1.5 million), equivalent to
14.7% of the segment's net sales (12.8%).
The Group's net sales grew in both business segments thanks to strong demand
from customer sectors. Operational profitability was at a good level both in the
Wiring Harnesses and the Electronics business. Business operations in North
America were successfully brought to a profitable level during the period, but
the result of North American operations is burdened by provisions made for their
restructuring, which will be completed during the second and third quarters of
this year.
BALANCE SHEET AND FINANCING
Consolidated total assets at 31 March 2008 stood at EUR 171.8 million (156.0
million). Interest-bearing liabilities totalled EUR 46.2 million at the close of
the report period (48.2 million). The Group's equity ratio was 46.0% (44.2%).
Net liabilities totalled EUR 37.1 million (42.2 million) and gearing was 46.9%
(61.2%).
Inventories amounted to EUR 45.0 million (36.2 million). Current receivables
totalled EUR 71.1 million (70.4 million). Cash flows from investing activities
during the report period were EUR 8.5 million (4.8 million negative). Cash in
hand and at bank amounted to EUR 9.1 million (6.1 million). In order to ensure
financing flexibility, PKC has available credit facilities.
CAPITAL EXPENDITURES
During the report period, the Group's gross capital expenditures totalled EUR
2.5 million (3.3 million), representing 2.9% of net sales (4.7%). Capital
expenditures consisted mostly of the acquisition of production machinery and
equipment.
RESEARCH AND DEVELOPMENT
Research and development expenditure totalled EUR 1.6 million (1.1 million),
representing 1.8% (1.6%) of consolidated net sales. At the end of the report
period, 94 (79) people were employed in product development.
PERSONNEL
During the report period, the Group had an average payroll of 5,538 employees
(4,740). At the end of the report period, the Group's personnel numbered 5,597
employees (4,831), of whom 4,857 (4,154) worked abroad and 740 (677) in Finland.
QUALITY AND THE ENVIRONMENT
The Group's wiring harnesses operations in Europe have been certified in
accordance with the requirements of the ISO/TS 16949 and ISO 9001 standards and
the ISO 14001 standard. The factories in China and Pskov, Russia, possess an ISO
14001 certificate and will be certified in accordance with the requirements of
the ISO/TS 16949 and ISO 9001 standards in the first half of the year. The North
American wiring harnesses operations have also been certified in accordance with
ISO/TS 16949, and the objective is to obtain a ISO 14001 certificate for the
environmental system at the Mexican factory in the spring of 2008. The
Electronics business's European operations have been certified in accordance
with the ISO 9001 and ISO 14001 standards. The electronics factory in China will
also be certified in the spring of 2008.
The improvement of the quality of operations is carried out in line with the
Group's quality strategy and the global action plans based on it. In accordance
with its environmental policy, PKC is committed to continuously minimising the
environmental impacts of its operations. The Electronics business and materials
sourcing operations strictly comply with the RoHS Directive.
ANNUAL GENERAL MEETING
The Annual General Meeting on 27 March 2008 passed a resolution to pay a
dividend of EUR 0.45 per share, or a total of about EUR 8.0 million. The
dividend was paid out on 8 April 2008.
The Annual General Meeting re-elected the following persons to seats on the
Board of Directors: Matti Eestilä, Jaakko Niemelä, Endel Palla, Olli
Pohjanvirta, Matti Ruotsala, Harri Suutari and Jyrki Tähtinen. At its
organisation meeting, the Board of Directors elected Harri Suutari Chairman and
Jyrki Tähtinen Vice Chairman.
The firm of independent public accountants Ernst & Young Oy will continue as the
company's auditor, with Rauno Sipilä, Authorised Public Accountant, acting as
the principal auditor.
SHARE TURNOVER AND SHAREHOLDERS
PKC Group Oyj's share turnover on OMX Nordic Exchange Helsinki from 1 January to
31 March 2008 was 4,551,043 shares (4,020,843 shares), representing 25.6% of the
average number of shares (22.6%). Shares were traded to a total value of EUR
34.7 million (43.8 million). The low during the report period was EUR 6.88 (9.4)
and the high was EUR 9.48 (12.40). The closing price on the last trading day of
the report period was EUR 7.04 (9.40) and the average price during the period
was EUR 7.58 (10.86). The company's market capitalisation at 31 March 2008 was
EUR 121.2 million (167.1 million).
Shares held by Board members, their related persons and corporations in which
they have a controlling interest accounted for 2.9% (3.1%) of the total number
of shares at the end of the report period. PKC Group Oyj had 7,172 shareholders
(6,184) at the end of the report period. The proportion of shares held by
foreigners and by way of nominee registrations at 31 March 2008 was 25.2% of the
shares outstanding (32.7%).
SHARE CAPITAL
The Board of Directors has been granted authorisation by the Annual General
Meeting on 29 March 2007 to decide on one or more share issues and the granting
of special rights as defined in Chapter 10, Section 1 of the Companies Act and
on all the terms and conditions thereof. A maximum total of 3,500,000 shares may
be issued or subscribed for on the basis of the authorisation. The authorisation
includes the right to decide on a directed share issue. The authorisation shall
remain in force for five years from the date of the resolution of the Annual
General Meeting. The authorisation may be used at the Board's discretion for
financing corporate acquisitions, for carrying out inter-company co-operation or
similar arrangements, or for strengthening the company's financing and capital
structure.
The Board of Directors does not have a valid authorisation to acquire the
company's own shares, and the company does not have any own shares (treasury
shares) in its possession.
STOCK OPTION SCHEMES
In 2006, PKC launched a stock option scheme according to which the maximum total
number of stock options to be issued is 697,500, and they are divided into A, B
and C warrants. At the close of the report period, the company's key personnel
had a total of 192,500 2006A warrants and 213,500 2006B warrants in their
possession.
The subscription period for shares through the exercise of stock options shall
be during the years 2009-2013. The share subscription price for stock options
shall be the volume-weighted average price of the PKC Group Oyj share on OMX
Nordic Exchange Helsinki, with dividend adjustments, as defined in the stock
option terms (at present, EUR 10.64 for the 2006A, 2006B and 2006C warrants).
Through the exercise of the 2006 stock options, the share capital of PKC Group
Oyj may be increased by a maximum total of 697,500 new shares and EUR
234,673.67. The stock options 2006 are subject to a share ownership plan. Key
personnel are obliged to subscribe for or purchase the company's shares with 20%
of the gross income earned from stock options and to own these shares for two
years. The company's President and CEO is obliged to own these shares for the
duration of his managerial contract.
EVENTS AFTER THE CLOSE OF THE REPORT PERIOD
The Board of PKC Group Oyj decided to terminate the service contract of
President and CEO Mika Kari and appointed Chairman of the Board Harri Suutari
the new President and CEO as from 3 April 2008. The Board elected Matti Ruotsala
as its new Chairman. Harri Suutari has resigned from the Board, and the Board
will continue with six members.
Mika Rytky, Vice President, Wiring Harnesses, has resigned from PKC Group Oyj's
service as from 3 April 2008.
Pekka Korkala and Jaan Murdla have been appointed Vice Presidents in charge of
the Wiring Harnesses business, with their areas of responsibility being divided
between production units. Jyri Kontio has been appointed Vice President in
charge of the Wiring Harnesses business's sourcing, quality and technology.
The Corporate Management Team is composed of President and CEO Harri Suutari
(Chairman), Pekka Korkala, Jaan Murdla, Jyri Kontio, Vice President
(Electronics) Jarmo Rajala and CFO Sami Klemola.
SHORT-TERM RISKS AND UNCERTAINTIES
The PKC Group strives to manage and limit any adverse effects of risks
encountered in its operations. The main risks are the market trend in the demand
for the products of its main customers, price pressures imposed by customers and
demands for tighter contractual terms, the availability of raw materials and
components and changes in their world market prices, as well as the adequacy of
production capacity in case demand rises rapidly.
The principles, objectives and organisation of the company's risk management as
well as key risk areas are described in the risk management section in the
Corporate Governance guidelines, which are available on the company's website,
www.pkcgroup.com.
OUTLOOK FOR THE FUTURE
The higher degree of uncertainty in the global economy has not been reflected in
customers' orders or forecasts. In accordance with customer forecasts, we expect
deliveries to the commercial vehicles industry to grow compared with the
previous year. Because of the continuing consolidation trend among customers,
competitors and suppliers and with overall demand potentially levelling off, the
competitive situation is expected to continue to become tighter.
The volume of wiring harnesses deliveries to the rest of the vehicle industry
and to customers in the telecommunications and automation industries is expected
to increase with the introduction of new product ranges.
Competition on the electronics contract design and manufacturing market will
remain stiff, calling for cost-efficiency and the capability to rapidly respond
to customers' worldwide needs. By offering customers services that cover all
stages of a product's life cycle, we will guarantee the continuation of close
co-operation based on trust in the future.
Consolidated net sales are expected to grow during the current year on the
previous year. Owing to the downward trend in selling prices, high raw materials
expenses and restructuring expenses, we expect operational profitability to
decline, while still remaining at a good level.
TABLES
--------------------------------------------------------------------------------
| CONSOLIDATED INCOME STATEMENT | 1-3/08 3 | 1-3/07 3 | 1-12/07 |
| (1000 EUR) | mon. | mon. | 12 mon. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES | 85,092 | 69,967 | 288,649 |
--------------------------------------------------------------------------------
| Increase (+) / decrease | -2,465 | 312 | 4,668 |
| (-) in stocks of finished goods | | | |
| and work in progress | | | |
--------------------------------------------------------------------------------
| Other operating income | 366 | 298 | 1,009 |
--------------------------------------------------------------------------------
| Raw materials and services | 44,873 | 39,402 | 162,665 |
--------------------------------------------------------------------------------
| Staff expenses | 19,244 | 15,742 | 66,824 |
--------------------------------------------------------------------------------
| Depreciation | 1,950 | 2,085 | 7,644 |
--------------------------------------------------------------------------------
| Other operating expenses | 7,584 | 6,876 | 29,022 |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 9,342 | 6,473 | 28,171 |
--------------------------------------------------------------------------------
| Interest and financial income and | -669 | -477 | -2,310 |
| expenses | | | |
--------------------------------------------------------------------------------
| Other financial income and | -1,363 | 97 | -219 |
| expenses | | | |
--------------------------------------------------------------------------------
| PROFIT BEFORE TAXES | 7,309 | 6,093 | 25,642 |
--------------------------------------------------------------------------------
| Income taxes | -2,684 | -1,719 | -8,063 |
--------------------------------------------------------------------------------
| PROFIT FOR THE REPORT PERIOD | 4,625 | 4,374 | 17,579 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | |
--------------------------------------------------------------------------------
| Shareholders of the parent | 4,602 | 4,321 | 17,374 |
| company | | | |
--------------------------------------------------------------------------------
| Minority interest | -24 | -53 | -205 |
--------------------------------------------------------------------------------
| Total | 4,625 | 4,374 | 17,579 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| From profit attributable to | | | |
| shareholders of the parent | | | |
| company | | | |
--------------------------------------------------------------------------------
| Basic earnings per share (EPS), | 0.26 | 0.24 | 0.98 |
| EUR | | | |
--------------------------------------------------------------------------------
| Diluted earning per share (EPS), | 0.26 | 0.24 | 0.98 |
| EUR | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET (1000 | 9/07 | 9/06 | 12/06 |
| EUR) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
| Goodwill | 5,676 | 6,024 | 6,214 |
--------------------------------------------------------------------------------
| Other intangible assets | 3,574 | 3,329 | 3,534 |
--------------------------------------------------------------------------------
| Tangible assets | 34,624 | 31,532 | 34,454 |
--------------------------------------------------------------------------------
| Deffered tax assets | 2,202 | 2,228 | 3,804 |
--------------------------------------------------------------------------------
| Other receivables | 425 | 224 | 388 |
--------------------------------------------------------------------------------
| Non-current assets total | 46,500 | 43,338 | 48,393 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CURRENT ASSSETS | | | |
--------------------------------------------------------------------------------
| Inventory | 45,007 | 36,191 | 46,954 |
--------------------------------------------------------------------------------
| Receivables | | | |
--------------------------------------------------------------------------------
| Trade receivables | 61,474 | 62,421 | 61,176 |
--------------------------------------------------------------------------------
| Other receivables | 8,605 | 7,981 | 9,001 |
--------------------------------------------------------------------------------
| Receivables total | 71,117 | 70,401 | 70,176 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 9,132 | 6,050 | 10,426 |
--------------------------------------------------------------------------------
| Current assets total | 125,257 | 112,642 | 127,556 |
--------------------------------------------------------------------------------
| ASSETS TOTAL | 171,757 | 155,980 | 175,949 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
| EQUITY | | | |
--------------------------------------------------------------------------------
| Share capital | 5,983 | 5,983 | 5,983 |
--------------------------------------------------------------------------------
| Share premium account | 4,862 | 4,862 | 4,862 |
--------------------------------------------------------------------------------
| Reserve fund | 239 | 166 | 239 |
--------------------------------------------------------------------------------
| Translation difference | -816 | -442 | 5 |
--------------------------------------------------------------------------------
| Share-based payment | 909 | 300 | 759 |
--------------------------------------------------------------------------------
| Retained earnings | 62,364 | 53,021 | 52,970 |
--------------------------------------------------------------------------------
| Profit for the reporting period | 4,602 | 4,321 | 17,374 |
--------------------------------------------------------------------------------
| Minority interest | 813 | 699 | 789 |
--------------------------------------------------------------------------------
| EQUITY TOTAL | 78,956 | 68,909 | 82,980 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 19,721 | 28,122 | 21,078 |
--------------------------------------------------------------------------------
| Non-interest-bearing liabilities | | | |
--------------------------------------------------------------------------------
| Provisions | 114 | 223 | 114 |
--------------------------------------------------------------------------------
| Deffered tax liabilities | 797 | 251 | 560 |
--------------------------------------------------------------------------------
| Non-current liabilities total | 20,631 | 28,597 | 21,752 |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 26,481 | 20,110 | 34,606 |
--------------------------------------------------------------------------------
| Trade payables | 21,822 | 17,453 | 21,173 |
--------------------------------------------------------------------------------
| Other liabilities | 23,867 | 20,911 | 15,438 |
--------------------------------------------------------------------------------
| Current liabilities total | 72,170 | 58,474 | 71,217 |
--------------------------------------------------------------------------------
| Liabilities total | 92,687 | 86,848 | 92,855 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES TOTAL | 171,757 | 155,980 | 175,949 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT | 1-3/08 3 | 1-3/07 3 | 1-12/07 |
| (1000 EUR) | mon. | mon. | 12 mon. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from operating | | |
|
| activities | | | |
--------------------------------------------------------------------------------
| Cash receipts from customers | 84,750 | 63,392 | 131,065 |
--------------------------------------------------------------------------------
| Cash receipts from other | 194 | 292 | 430 |
| operating activities | | | |
--------------------------------------------------------------------------------
| Cash paid to suppliers and | -72,092 | 62,631 | 125,486 |
| employees | | | |
--------------------------------------------------------------------------------
| Cash flows from operations before | 12,851 | 1,054 | 6,010
|
| financial income and expenses and | | | |
| taxes | | | |
--------------------------------------------------------------------------------
| Interest paid | -2,091 | 227 | 342 |
--------------------------------------------------------------------------------
| Interest received and other | 986 | 169 | 371 |
| financial income | | | |
--------------------------------------------------------------------------------
| Income taxes paid | -786 | 2,521 | 4,489 |
--------------------------------------------------------------------------------
| Net cash from operating | 10,961 | -1,496 | 1,550 |
| activities (A) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from investing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Purchase of tangible and | 2,410 | -2,533 | -11,143 |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of tangible | -100 | 539 | 108 |
| and intangible assets | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries | | -1,298 | -1,380 |
--------------------------------------------------------------------------------
| Loans granted | -4 | 0 | -11 |
--------------------------------------------------------------------------------
| Loans received | 3 | 0 | 9 |
--------------------------------------------------------------------------------
| Dividens received | 0 | 0 | 1 |
--------------------------------------------------------------------------------
| Net cash flow from investing | -2,410 | -3,292 | -12,416 |
| activities (B) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Increase of credits | 148 | 5,000 | 18,843 |
--------------------------------------------------------------------------------
| DecreaseSra2008-04-18T00:00:00? | -9,992 | -2,251 | -8,642 |
| of credits | | | |
--------------------------------------------------------------------------------
| Dividends paid | 0 | 0 | -8,077 |
--------------------------------------------------------------------------------
| Net cash used in financing | -9,844 | 2,749 | 2,123 |
| activities (C) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net increase (+) or decrease (-) | -1,293 | -2,039 | 2,365 |
| in cash and equivalents (A+B+C) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP KEY FINANCIAL INDICATORS | 1-3/08 3 | 1-3/07 3 | 1-12/07 |
| | mon. | mon. | 12 mon. |
--------------------------------------------------------------------------------
| Net sales, 1000 EUR | 85,092 | 69,967 | 288,649 |
--------------------------------------------------------------------------------
| Operating profit, 1000 EUR | 9,342 | 6,473 | 28,171 |
--------------------------------------------------------------------------------
| % of net sales | 11.0 | 9.3 | 9.8 |
--------------------------------------------------------------------------------
| Profit before taxes, 1000 EUR | 7,309 | 6,093 | 25,642 |
--------------------------------------------------------------------------------
| % of net sales | 8.6 | 8.7 | 8.9 |
--------------------------------------------------------------------------------
| Net profit for the period, 1000 | 4,602 | 4,321 | 17,374 |
| EUR | | | |
--------------------------------------------------------------------------------
| % of net sales | 5.4 | 6.2 | 6.0 |
--------------------------------------------------------------------------------
| Return on equity,(ROE) % | 22.9 | 24.7 | 22.6 |
--------------------------------------------------------------------------------
| Return on investments, (ROI) % | 31.8 | 23.4 | 23.4 |
--------------------------------------------------------------------------------
| Net liabilities, 1000 EUR | 37,070 | 42,182 | 45,258 |
--------------------------------------------------------------------------------
| Gearing, % | 46.9 | 61.2 | 54.5 |
--------------------------------------------------------------------------------
| Equity ratio, % | 46.0 | 44.2 | 47.2 |
--------------------------------------------------------------------------------
| Current ratio | 1.7 | 1.9 | 1.8 |
--------------------------------------------------------------------------------
| Gross capital expenditure, 1000 | 2,466 | 3,271 | 10,791 |
| EUR | | | |
--------------------------------------------------------------------------------
| % of net sales | 2.9 | 4.7 | 3.7 |
--------------------------------------------------------------------------------
| R&D expenditures, 1000 EUR | 1,566 | 1,141 | 5,511 |
--------------------------------------------------------------------------------
| % of net sales | 1.8 | 1.6 | 1.9 |
--------------------------------------------------------------------------------
| Personnel average | 5,538 | 4,740 | 4,971 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP PER-SHARE KEY FIGURES | 1-3/08 3 | 1-3/07 3 | 1-12/07 |
| | mon. | mon. | 12 mon. |
--------------------------------------------------------------------------------
| Earnings per share (EPS), EUR | 0.26 | 0.24 | 0.98 |
--------------------------------------------------------------------------------
| Earnings per share (EPS),diluted, | 0.26 | 0.24 | 0.98 |
| EUR | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | 4.39 | 3.84 | 4.62 |
--------------------------------------------------------------------------------
| Share price at close of period, | 7.04 | 9.40 | 8.70 |
| EUR | | | |
--------------------------------------------------------------------------------
| Lowest share price, EUR | 6.88 | 9.40 | 8.55 |
--------------------------------------------------------------------------------
| Highest share price, EUR | 9.48 | 12.40 | 12.40 |
--------------------------------------------------------------------------------
| Average share price, EUR | 7.58 | 10.86 | 10.48 |
--------------------------------------------------------------------------------
| Turnover in shares, 1000 shares | 4,551 | 4,021 | 17,640 |
--------------------------------------------------------------------------------
| Turnover in shares per (share | 25.6 | 22.6 | 99.2 |
| issue adjusted) share capital, % | | | |
--------------------------------------------------------------------------------
| Average number of shares, 1000 | 17,782 | 17,782 | 17,782 |
| shares | | | |
--------------------------------------------------------------------------------
| Average number of shares, | 17,585 | 17,748 | 17,782 |
| diluted, 1000 shares | | | |
--------------------------------------------------------------------------------
| Shares at end of period, 1000 | 17,782 | 17,782 | 17,782 |
| shares | | | |
--------------------------------------------------------------------------------
| Market capitalisation, 1000 EUR | 121,182 | 167,146 | 154,699 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1. SEGMENT INFORMATION | 1-3/08 3 | 1-3/07 3 | 1-12/07 |
| | mon. | mon. | 12 mon. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES BY BUSINESS SEGMENTS | | | |
--------------------------------------------------------------------------------
| Wiring Harnesses, 1000 EUR | 69,391 | 58,132 | 230,183 |
--------------------------------------------------------------------------------
| Net sales to other segments, 1000 | -67 | -12 | -170 |
| EUR | | | |
--------------------------------------------------------------------------------
| Wiring Harnesses, total, 1000 EUR | 69,324 | 58,121 | 230,013 |
--------------------------------------------------------------------------------
| Wiring Harnesses, % of net sales | 81.5 | 83.1 | 79.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Electronics, 1000 EUR | 15,996 | 12,019 | 59,471 |
--------------------------------------------------------------------------------
| Net sales to other segments, 1000 | -228 | -173 | -835 |
| EUR | | | |
--------------------------------------------------------------------------------
| Electronics, total, 1000 EUR | 15,768 | 11,846 | 58,636 |
--------------------------------------------------------------------------------
| Electronics, % of net sales | 18.5 | 16.9 | 20.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Group Total | 85,092 | 69,967 | 288,649 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING PROFIT BY BUSINESS | | | |
| SEGMENTS | | | |
--------------------------------------------------------------------------------
| Wiring Harnesses, 1000 EUR | 7,018 | 4,940 | 18,746 |
--------------------------------------------------------------------------------
| Wiring Harnesses, % of net sales | 10.1 | 8.5 | 8.2 |
--------------------------------------------------------------------------------
| Electronics, 1000 EUR | 2,324 | 1,533 | 9,424 |
--------------------------------------------------------------------------------
| Electronics, % of net sales | 14.7 | 12.8 | 16.1 |
--------------------------------------------------------------------------------
| Group Total | 9,342 | 6,473 | 28,171 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES BY GEOGRAPHICAL | | | |
| SEGMENTS (1000 EUR) | | | |
--------------------------------------------------------------------------------
| Finland | 15,606 | 12,487 | 54,411 |
--------------------------------------------------------------------------------
| Other Europe | 45,040 | 39,805 | 153,727 |
--------------------------------------------------------------------------------
| North America | 9,338 | 8,147 | 30,692 |
--------------------------------------------------------------------------------
| South America | 10,711 | 7,804 | 36,145 |
--------------------------------------------------------------------------------
| Other Countries | 4,396 | 1,724 | 13,673 |
--------------------------------------------------------------------------------
| Total | 85,092 | 69,967 | 288,649 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2. RECONCILIATION OF EQUITY (MILLION EUR) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| A = Share Capital |
--------------------------------------------------------------------------------
| B = Share premium account |
--------------------------------------------------------------------------------
| C = Fair value and other reserves |
--------------------------------------------------------------------------------
| D = Retained earnings |
--------------------------------------------------------------------------------
| E = Minority interest |
--------------------------------------------------------------------------------
| F = Total equity |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | A | B | C | D | E | F |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | 6.0 | 4.9 | 0.2 | 60.9 | 0.6 | 72.5 |
| 1.1.2007 | | | | | | |
--------------------------------------------------------------------------------
| Profit for the | 0 | 0 | 0 | 4.3 | 0.1 | 4.4 |
| period | | | | | | |
--------------------------------------------------------------------------------
| Dividends | 0 | 0 | 0 | -8.0 | 0 | -8.0 |
--------------------------------------------------------------------------------
| Share options used | 0 | 0.0 | 0 | 0 | 0 | 0.0 |
--------------------------------------------------------------------------------
| Translation | 0 | 0 | 0 | 0.1 | 0 | 0.1 |
| differences | | | | | | |
--------------------------------------------------------------------------------
| Other changes | 0 | 0 | 0.0 | 0 | 0 | 0.0 |
--------------------------------------------------------------------------------
| Shareholders' equity | 6.0 | 4.9 | 0.2 | 57.2 | 0.7 | 68.9 |
| 31.3.2007 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | 6.0 | 4.9 | 0.2 | 71.1 | 0.8 | 83.0 |
| 1.1.2008 | | | | | | |
--------------------------------------------------------------------------------
| Profit for the | 0 | 0 | 0 | 4.6 | 0.0 | 4.6 |
| period | | | | | | |
--------------------------------------------------------------------------------
| Dividends | 0 | 0 | 0 | -8.0 | 0 | -8.0 |
--------------------------------------------------------------------------------
| Share-based payments | 0 | 0 | 0 | 0.2 | 0 | 0.2 |
--------------------------------------------------------------------------------
| Translation | 0 | 0 | 0 | -0.8 | 0 | -0.8 |
| differences | | | | | | |
--------------------------------------------------------------------------------
| Other changes | 0 | 0 | 0.1 | 0.0 | 0 | 0 |
--------------------------------------------------------------------------------
| Shareholders' equity | 6.0 | 4.9 | 0.3 | 67.1 | 0.8 | 79.0 |
| 31.3.2008 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 3. GROUP CONTINGENT LIABILITIES | | | |
| AT END OF PERIOD (1000 EUR) | | | |
--------------------------------------------------------------------------------
| Leasing liabilities | 5,414 | 6,906 | 5,668 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities for derivate | | | |
| instruments | | | |
--------------------------------------------------------------------------------
| Nominal values | | | |
--------------------------------------------------------------------------------
| Currency derivates | | | |
--------------------------------------------------------------------------------
| Forward contracts | 2,055 | 6,248 | 5,740 |
--------------------------------------------------------------------------------
| Option agreements | | | |
--------------------------------------------------------------------------------
| Call | 791 | 0 | 1,598 |
--------------------------------------------------------------------------------
| Total | 2,846 | 6,248 | 7,338 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fair values | | | |
--------------------------------------------------------------------------------
| Currency derivates | | | |
--------------------------------------------------------------------------------
| Forward contracts | -223 | -134 | -105 |
--------------------------------------------------------------------------------
| Option agreements | | | |
--------------------------------------------------------------------------------
| Call | 176 | 0 | -144 |
--------------------------------------------------------------------------------
| Total | -47 | -134 | -249 |
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Currency derivates are used only in hedging currency risks. PKC Group does not
apply hedge accounting to derivate instruments in accordance with IAS 39. Fair
values of the derivates are entered directly in the income statement.
--------------------------------------------------------------------------------
| 4. QUARTERLY KEY | 10-12/ | 1-3/07 | 4-6/07 | 6-9/07 | 9-12/07 | 1-3/08 |
| FIGURES, | 06 3 | 3 mon. | 3 mon. | 3 mon. | 3 mon. | 3 mon. |
| CONSOLIDATED | mon. | | | | | |
--------------------------------------------------------------------------------
| Net sales, EUR | 65.59 | 69.97 | 73.67 | 66.93 | 78.08 | 85.09 |
| million | | | | | | |
--------------------------------------------------------------------------------
| Operating profit, | 3.91 | 6.47 | 7.34 | 7.56 | 6.8 | 9.34 |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 6.0 | 9.3 | 10.0 | 11.3 | 8.7 | 11.0 |
--------------------------------------------------------------------------------
| Profit before | 3.00 | 6.09 | 7.14 | 6.77 | 5.63 | 7.31 |
| taxes, EUR | | | | | | |
| million | | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 4.6 | 8.7 | 9.7 | 10.1 | 7.2 | 8.6 |
--------------------------------------------------------------------------------
| Equity ratio, % | 48.0 | 44.2 | 45.9 | 47.0 | 47.2 | 46.0 |
--------------------------------------------------------------------------------
| Earnings per | 0.11 | 0.24 | 0.30 | 0.25 | 0.19 | 0.26 |
| share (EPS), | | | | | | |
| diluted (EUR) | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 4.04 | 3.84 | 4.18 | 4.43 | 4.62 | 4.39 |
| equity per share, | | | | | | |
| EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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| QUARTERLY KEY | | | | | | |
| FIGURES, WIRING | | | | | | |
| HARNESSESS | | | | | | |
--------------------------------------------------------------------------------
| Net sales, EUR | 53.65 | 58.12 | 59.77 | 50.16 | 61.97 | 69.32 |
| million | | | | | | |
--------------------------------------------------------------------------------
| Operating profit, | 2.79 | 4.94 | 5.57 | 3.31 | 4.61 | 7.02 |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 5.2 | 8.5 | 9.3 | 6.6 | 7.4 | 10.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| QUARTERLY KEY | | | | | | |
| FIGURES, | | | | | | |
| ELECTRONICS | | | | | | |
--------------------------------------------------------------------------------
| Net sales, EUR | 11.95 | 11.85 | 13.91 | 16.77 | 16.12 | 15.77 |
| million | | | | | | |
--------------------------------------------------------------------------------
| Operating profit, | 1.12 | 1.53 | 1.77 | 4.25 | 2.19 | 2.32 |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 9.3 | 12.9 | 12.8 | 25.3 | 13.6 | 14.7 |
--------------------------------------------------------------------------------
CALCULATION OF INDICATORS
Return on equity (ROE), %
= 100 x (Profit before extraordinary items - taxes) / Shareholders' equity +
minority interest (average)
Return on investments (ROI), %
= 100 x (Profit before extraordinary items - interest and other financial
expenses) / Balance sheet total - non-interest-bearing liabilities (average)
Gearing, %
= 100 x (Interest-bearing liabilities - cash in hand and at bank and
investments) / Shareholders' equity + minority interest
Equity ratio, %
= 100 x (Shareholders' equity + minority interest) / Balance sheet total -
advance payments received
Quick ratio
= Receivables and cash in hand and at bank / Current liabilities - advance
payments received
Current ratio
Receivables and cash in hand and at bank + inventories / Current liabilities
Earnings per share (EPS), EUR
Profit before extraordinary items - income taxes +/- minority interest / Average
share issue-adjusted number of shares
Shareholders' equity per share, EUR
Shareholders' equity / Share issue-adjusted number of shares on the balance
sheet date
Market capitalisation
Number of shares at the end of the financial period x the last trading price of
the financial period
The figures presented have not been audited. This Quarterly Report has been
prepared in accordance with International Financial Reporting Standards (IFRS).
All the future estimates and forecasts presented in this stock exchange release
are based on the best current knowledge of the company's management. The
estimates and forecasts contain certain elements of risk and uncertainty which,
if they materialise, may lead to results that differ from present estimates. The
main factors of uncertainty are related, among other things, to the general
economic situation, the trend in the operating environment and the sector as
well as the success of the Group's strategy.
PKC GROUP OYJ
Board of Directors
Harri Suutari
President and CEO
For additional information, contact:
Harri Suutari, President & CEO, PKC Group Oyj, +358 20 1752 350
PRESS CONFERENCE
A press conference on the Quarterly Report will be arranged for analysts and
investors today, 18 April 2008, at 10.00 a.m., at the address World Trade
Center, Marskin sali, Aleksanterinkatu 17, Helsinki.
DISTRIBUTION
OMX Nordic Exchange Helsinki
Main media
www.pkcgroup.com
The PKC Group offers design and contract manufacturing services for wiring
harnesses, cabling and electronics. The Group has production facilities in
Finland, Brazil, China, Mexico, Estonia and Russia, and employs over 5,500
people. The Group's net sales in 2007 totalled EUR 288.6 million. PKC Group Oyj
is listed on OMX Nordic Exchange Helsinki.