PKC Group Plc Interim Report 6 August 2015 8.15 a.m.
PKC Group Q2/2015:
Group EBITDA before non-recurring items up 22%, driven by continued improvement in Wiring Systems segment
This release is a summary of PKC Group’s Interim Report January-June 2015. The complete report is attached to this release as a pdf-file. It is also available on the company website at www.pkcgroup.com.
April - June 2015 highlights
- Revenue increased 8.7% on the comparison period (4-6/2014), totalling EUR 223.9 million (EUR 206.0 million). The changes in consolidation exchange rates increased the revenue by approximately +13%.
- EBITDA before non-recurring items increased 21.5% on the comparison period (4-6/2014), totalling EUR 15.7 million (EUR 12.9 million) and 7.0% (6.3%) of revenue.
- Wiring Systems business segment’s EBITDA before non-recurring items increased 22.2% on the comparison period (4-6/2014), totalling EUR 16.5 million (EUR 13.5 million) and 7.9% (7.1%) of revenue.
- Operating profit before non-recurring items increased 33.2% on the comparison period (4-6/2014), totalling EUR 8.1 million (EUR 6.1 million) and 3.6% (3.0%) of revenue.
- Diluted earnings per share were EUR -0.06 (EUR 0.11) including the impact of EUR 5.4 million (EUR 1.5 million) non-recurring items in operating profit.
- Cash flow after investments was EUR 1.6 million (EUR 7.4 million).
January - June 2015 highlights
- Revenue increased 9.8% on the comparison period (1-6/2014), totalling EUR 450.4 million (EUR 410.0 million). The changes in consolidation exchange rates increased the revenue by approximately +12%.
- EBITDA before non-recurring items increased 31.2% on the comparison period (1-6/2014), totalling EUR 32.4 million (EUR 24.7 million) and 7.2% (6.0%) of revenue.
- Wiring Systems business segment’s EBITDA before non-recurring items increased 26.4% on the comparison period (1-6/2014), totalling EUR 31.8 million (EUR 25.2 million) and 7.7% (6.6%) of revenue.
- Operating profit before non-recurring items increased 51.2% on the comparison period (1-6/2014), totalling EUR 17.3 million (EUR 11.4 million) and 3.8% (2.8%) of revenue.
- Diluted earnings per share were EUR 0.12 (EUR 0.15) including the impact of EUR 5.9 million (EUR 4.2 million) non-recurring items in operating profit.
- Cash flow after investments was EUR -30.2 million (EUR -11.0 million).
PKC Group’s outlook for 2015
- PKC Group estimates that with prevailing exchange rates 2015 revenue will be higher than previous year level, and that comparable EBITDA will be higher than in 2014. In 2014, PKC’s revenue was EUR 829.5 million and comparable EBITDA before non-recurring items was EUR 48.6 million*. Revenue and EBITDA estimates are based on current business structure.
| Key figures* | 4-6/15 | 4-6/14 | Change % | 1-6/15 | 1-6/14 | Change % | 1-12/14 | ||
| EUR 1,000 (unless otherwise noted) | |||||||||
| Revenue | 223,886 | 205,966 | +8.7 | 450,380 | 410,023 | +9.8 | 829,516 | ||
| EBITDA** | 15,708 | 12,926 | +21.5 | 32,441 | 24,732 | +31.2 | 48,572 | ||
| % of revenue | 7.0 | 6.3 | 7.2 | 6.0 | 5.9 | ||||
| Operating profit** | 8,118 | 6,095 | +33.2 | 17,268 | 11,421 | +51.2 | 21,384 | ||
| % of revenue | 3.6 | 3.0 | 3.8 | 2.8 | 2.6 | ||||
| Non-recurring items | -5,361 | -1,465 | -5,943 | -4,200 | -28,362 | ||||
| Operating profit (loss) | 2,757 | 4,631 | -40.5 | 11,324 | 7,221 | +56.8 | -6,978 | ||
| % of revenue | 1.2 | 2.2 | 2.5 | 1.8 | -0.8 | ||||
| Profit (loss) before taxes | 1,397 | 3,871 | -63.9 | 9,182 | 5,225 | +75.7 | -10,528 | ||
| Net profit (loss) for the report period | -1,388 | 2,593 | -153.5 | 2,972 | 3,501 | -15.1 | -29,051 | ||
| Earnings per share (EPS), EUR | -0.06 | 0.11 | -153.4 | 0.12 | 0.15 | -15.3 | -1.21 | ||
| Cash flow after investments | 1,550 | 7,390 | -79.0 | -30,245 | -10,965 | 175.8 | 20,699 | ||
| ROCE,% | 12.8 | 7.8 | 7.7 | ||||||
| Gearing, % | 21.1 | 14.0 | -5.6 | ||||||
| Average number of personnel | 19,848 | 19,246 | +3.1 | 19,766 | 19,026 | +3.9 | 19,640 | ||
| * PKC Group has reclassified certain financial items and operating expenses as of the beginning of 2015. Comparison periods have been adjusted accordingly. The changes to revenue and operating profit (loss) are minor and have no impact on the net profit (loss) for the period or shareholders’ equity. The changes are presented in detail in the table section of the interim report Q1/2015. | |||||||||
| ** before non-recurring items | |||||||||
Matti Hyytiäinen, President & CEO:
Revenue in the second quarter increased on the comparison period by 8.7% and was EUR 223.9 million. In North America and Europe, production of heavy-duty trucks grew on the comparison period and on the first quarter of the current year. However, production volumes of medium-duty trucks in North America and in Europe declined in comparison with both the comparison period and first quarter. In Brazil, production volumes continued to decline in comparison with the comparison period but were higher than in the first quarter’s holiday season.
PKC's operating profit before non-recurring items increased on the comparison period by 33.2% and was EUR 8.1 million. In North America, the largest production unit in Acuna, Mexico was hit by a tornado in May causing production stoppage that had negative impact on the unit’s profitability. In Europe, the ongoing production reorganisation continued to encumber profitability but progressed as planned apart from some production transfers that have been delayed due to customers’ approval processes. In Brazil despite low production volumes, actions to improve operating profit are taking effect although operations remained loss-making. The medium term outlook for truck market in Brazil is weak and therefore we have decided to close Curitiba factory and consolidate all production to Campo Alegre factory.
PKC 2018 strategy is proceeding. The acquisition of Groclin’s Wiring & Controls business that was announced in February has been finalised and business shall be consolidated into PKC Group as of 1 July 2015. Customers and personnel have reacted positively to the acquisition. Also the establishment of Chinese joint venture with Huakai announced in March has proceeded quickly and it is estimated that the company starts operations in Q3/2015.
In North America the full-year production volume forecasts for trucks are slightly weaker than previous estimation. The demand in North America has stabilised. In Europe, the production volumes in the second half of the year are estimated to fall slightly short of first half’s volumes taking into account the holiday season production stoppages. In Brazil, production volume estimates have been further decreased.
PKC's strong market position is a result of our personnel’s commitment to high-quality customer service. I wish to thank all PKC personnel for their good performance.
Market outlook
Wiring Systems Business
In 2015 the production of heavy-duty and medium-duty trucks in Europe is expected to grow by about 5% compared to previous year’s level.
In 2015 the production of heavy-duty and medium-duty trucks in North America is expected to increase by about 7%, and production of light vehicles to increase by about 5% compared to 2014.
In 2015 the production of heavy-duty and medium-duty trucks in Brazil is expected to be clearly lower than previous year. The economic and political uncertainty in Brazil bear a significant risk for Brazilian truck sales to further drop in 2015.
Electronics Business
The market demand for Electronics segment’s products is expected to remain on the current level at the most.
PKC Group Plc
Board of Directors
Matti Hyytiäinen
President & CEO
For additional information, contact:
Matti Hyytiäinen, President & CEO, PKC Group Plc, tel. +358 (0)400 710 968
Juha Torniainen, CFO, PKC Group Plc, tel. +358 (0)40 570 8871
Press conference
A press conference on the interim report will be arranged for analysts and investors today, 6 August 2015, at 10.00 a.m., at the address Event Arena Bank, Unioninkatu 20, Helsinki.
Attachment
PKC interim report Q2 2015
Distribution
Nasdaq Helsinki
Main media
www.pkcgroup.com
PKC Group is a global partner, designing, manufacturing and integrating electrical distribution systems, electronics and related architecture components for the commercial vehicle industry, rolling stock manufacturers and other selected segments. The Group has production facilities in Brazil, China, Estonia, Finland, Germany, Lithuania, Mexico, Poland, Russia, Serbia and the USA. The Group's revenue in 2014 totalled EUR 829.5 million. PKC Group Plc is listed on Nasdaq Helsinki.
