PKC Group Oyj FINANCIAL STATEMENT RELEASE 17 February 2011 8.15 a.m.
PKC GROUP’S FINANCIAL STATEMENT RELEASE, 1 January – 31 December 2010
- Consolidated net sales grew 56.6% on the previous year (1-12/2009), totalling EUR 316.1 million (EUR 201.8 million).
- Consolidated operating profit was EUR 29.7 million (EUR 0.7 million) i.e. 9.4% (0.3%) of net sales. Comparable operating profit without non-recurring items was EUR 31.5 million (EUR 5.1 million), 10.0% (2.5%) of net sales.
- Profit for the financial year amounted to EUR 19.7 million (EUR 2.3 million).
- Earnings per share were EUR 1.09 (EUR 0.13).
- Cash flows after investments were EUR 14.9 million (EUR 37.6 million).
- Gearing was 1.7% negative (35.9%).
- Equity ratio was 56.5% (49.2%)
- Net liabilities were EUR 1.2 million negative (EUR 28.2 million).
- A dividend of EUR 0.55 per share will be proposed.
|
KEY FIGURES |
1-12/10 |
1-12/09 |
| Net sales, EUR 1,000 | 316,081 | 201,814 |
| Operating profit, EUR 1,000 | 29,689 | 682 |
| % of net sales | 9.4 | 0.3 |
| Profit for the financial year, EUR 1,000 | 19,683 | 2,349 |
| Earnings per share (EPS), EUR | 1.09 | 0.13 |
| ROI,% | 25.8 | 6.4 |
| Net liabilities, EUR 1,000 | -2,068 | 28,245 |
| Gearing, % | -1.7 | 35.9 |
| Average number of personnel | 5,039 | 4,478 |
HARRI SUUTARI, PRESIDENT AND CEO:
“During the final quarter, the sales of PKC Group continued to grow along with the recovery of the markets. Sales increased in both business segments and in all of our market areas.
Commercial vehicle manufacture continued its growth in our key market areas in Europe and Brazil, and in the the final quarter our customers received more orders than they delivered vehicles within the same period. We expect the growth to continue on the key markets this year.
Accelerated by customers’ growth in the industrial electronics and energy segments, PKC Group’s deliveries of electronics design and manufacturing services increased from the level of the previous quarter. We expect the growth to continue this year.
Profitability improvement was limited by unfavourable price development of raw and other materials. However, profitability remained at a good level thanks to the growth in sales and the cost reductions made earlier.
In line with our strategy, our aim is not only organic growth but also business growth through acquisitions.”
OPERATING ENVIRONMENT
Wiring Harness business
Registrations of heavy trucks increased in Europe (EU, Norway and Switzerland) in 2010 by about 8% compared to 2009. About 179,000 heavy trucks were registered during the financial year. The number of registrations in Europe is still exceptionally low. The industry and analysts expect the number to increase to about 220,000–230,000 registrations in 2011.
In Brazil, deliveries of heavy trucks increased by about 64% from the previous year, totalling about 110,000 vehicles. Our customers’ order volumes from the final quarter support the automotive industry’s general assumption of the markets remaining at least at the current level in 2011.
Registrations of heavy trucks in North America increased in 2010 by about 20% from the previous year, totalling about 140,000 trucks. The industry and analysts expect the number to increase to about 220,000 registrations this year. The order intake from the last four months (October 2010 to January 2011), about 100,000 vehicles, shows signs of strong growth in North America.
In North America, the recreational vehicle deliveries of our customers increased in 2010 by about 50% from the previous year’s level.
Although PKC Group has no wiring harness production of its own in Asia, the increasing export to Asia by our customers supports the growth of PKC’s production volumes.
The sales of construction equipment increased in Europe by about 4% from the previous year. The market is expected to growth a further 5–15% during 2011.
Sales of agricultural tractors declined in Europe in 2010 by 10% from the previous year’s sales. By contrast, forestry equipment sales increased from the exceptionally weak comparison year.
Electronics business
The recovery of the global economy and revival of the electronics industry increased the demand for the design and manufacturing services of PKC’s Electronics business in 2010. In particular, customers in the industrial electronics and energy segments increased their sales during the latter half of the year.
Due to the global growth in the electronics industry, there have still been problems in the availability of electronics components.
NET SALES AND FINANCIAL PERFORMANCE
October-December 2010
Consolidated net sales from October-December amounted to EUR 91.9 million (EUR 55.4 million), up 66.0% on the same period a year earlier. Consolidated operating profit totalled EUR 9.8 million (EUR 2.6 million), accounting for 10.6% of net sales (4.8%). During the report period were reported EUR 0.2 million in non-recurring expenses (the operating profit on the same period year earlier included a non-recurring item of EUR 0.7 million as a result of the costs of rationalisation being lower than what had been estimated). Depreciation amounted to EUR 2.5 million (EUR 2.6 million). Financial items were EUR 3.1 million negative (EUR 0.8 million negative). In addition to EUR 0.7 million interest expenses, a translation loss of EUR 0.8 million related to the translation of subsidiaries’ financial statements, as well as exchange rate loss caused mainly by Group’s internal liabilities totalling EUR 1.6 million have been entered into the financial items. Profit before taxes was EUR 6.6 million (EUR 1.8 million). Profit for the report period totalled EUR 5.3 million (EUR 3.2 million). Earnings per share were EUR 0.29 (EUR 0.18).
January-December 2010
Consolidated net sales from financial year amounted to EUR 316.1 million (EUR 201.8 million), up 56.6% on the previous financial year. Consolidated operating profit totalled EUR 29.7 million (EUR 0.7 million), accounting for 9.4% of net sales (0.3%). The result was burdened by EUR 1.8 million (EUR 4.3 million) mainly in non-recurring rationalisation expenses. Depreciation amounted to EUR 10.7 million (EUR 11.0 million). Financial items were EUR 4.7 million negative (EUR 0.4 million). In addition to EUR 2.0 million interest expenses, a translation loss of EUR 1.0 million related to the translation of subsidiaries’ financial statements as well as exchange rate losses caused mainly of Group’s internal liabilities totalling EUR 1.8 million have been entered into the financial items. Profit before taxes was EUR 25.0 million (EUR 1.1 million). Profit for the financial year totalled EUR 19.7 million (EUR 2.3 million). Earnings per share were EUR 1.09 (EUR 0.13).
Net sales generated by the Wiring Harness business in the financial year amounted to EUR 242.4 million (EUR 149.4 million), or 62.3% more than in the previous financial year. The segment’s share of the consolidated net sales was 76.7% (74.0%). Wiring Harness business generated an operating profit of EUR 24.5 million (EUR 3.9 million negative), equivalent to 10.1% of the segment’s net sales (2.6% negative). The result of the Wiring Harness business was burdened in total by EUR 1.8 million (EUR 4.4 million) in non-recurring expenses.
Net sales generated by the Electronics business increased by 40.4% to EUR 73.7 million (EUR 52.5 million). The segment’s share of the consolidated net sales was 23.3% (26.0%). Electronics business generated an operating profit of EUR 7.7 million (EUR 4.6 million), equivalent to 10.4% of the segment’s net sales (8.7%).
FINANCIAL POSITION AND CASH FLOW
Consolidated total assets at 31 December 2010 amounted to EUR 219.0 million (EUR 159.9 million). Interest-bearing liabilities totalled EUR 35.0 million at the close of the financial year (EUR 43.6 million). The Group’s equity ratio was 56.5% (49.2%). Net liabilities totalled EUR 2.1 million negative (EUR 28.2 million) and the gearing was 1.7% negative (35.9%).
Inventories amounted to EUR 58.1 million (EUR 36.1 million). Current receivables totalled EUR 57.8 million (EUR 43.5 million). Cash flows after investments during the financial year were EUR 14.9 million (EUR 37.6 million). Cash and cash equivalents amounted to EUR 37.1 million (EUR 15.3 million). Based on Board of Directors resolution on the directed share issue, the total share subscription price of EUR 21.5 million has been recognised in Invested non-restricted equity fund. In order to ensure financing flexibility, PKC has available a total of EUR 15 million financing and credit facilities, of which EUR 15 million has remained unused.
CAPITAL EXPENDITURE
During the financial year, the Group’s gross capital expenditure totalled EUR 8.6 million (EUR 3.9 million), representing 2.7% of net sales (1.9%). The capital expenditure consisted mostly of the acquisition of production machinery and equipment.
RESEARCH & DEVELOPMENT
Research and development costs totalled EUR 5.7 million (EUR 5.5. million), representing 1.8% (2.7%) of the consolidated net sales. At the end of the financial year, 110 (114) people worked in product development.
PERSONNEL
During the financial year, the Group had an average payroll of 5,039 employees (4,478). At the end of the financial yaer, the Group’s personnel numbered 5,765 employees (4,077), of whom 5,326 (3,617) worked abroad and 439 (460) in Finland. In addition the Group had at the end of the financial year 708 rented employees.
As a result of the co-determination negotiations concluded in March 2010, it was decided to lay off a total of 45 persons from PKC Wiring Systems Oy. Non-recurring costs arising from layoffs were recorded during the first half of the year to the total amount of EUR 0.6 million.
As a result of the co-determination negotiations concluded in August 2010, it was decided to lay off a total of 31 persons from PKC Wiring Systems Oy. Non-recurring costs arising from layoffs were recorded during the third quarter of the year to the total amount of EUR 0.5 million.
QUALITY AND THE ENVIRONMENT
All of the Group’s Wiring Harness factories are certified in accordance with requirements of the ISO/TS16949 quality standard for the automotive industry and with the ISO9001 quality standard as well as with the ISO14001 environmental standard. Production unit in Curitiba (Brazil) has also certification in accordance with the OHSAS18001 occupational health and safety management system standard.
The Group’s Electronic factories are certified in accordance with the requirements of the ISO9001 and ISO14001 standards. In addition, the Finnish factory is certified in conformity with the ISO/TS16949 automotive industry quality standard. The certification process of the ISO/TS16949 in China has been completed after the report period. The certification process of the ISO/TS16949 quality standard in the unit of Russia will be completed during the first quarter in 2011. During 2011 all units will be certified in conformity with the OHSAS18001 occupational health and safety management system standard.
Best Quality Practices are a part of PKC’s strategy, and they enable the close participation of each employee in daily quality work and the continuous improvement of quality. The selected practices are tried and tested quality tools and procedures that aid the development and standardisation of production processes, methods, and products, ensuring that they are as uniform as possible, regardless of production site. Best Quality Practices also include Six Sigma, use of which has been increased in the Wiring Harness business in the implementation of strategically important development projects and Six Sigma practices have been trained to personnel. During the report period, also the Electronic business embarked upon a Best Quality Practices and Six Sigma projects as part its own operation. The progress of practices is actively monitored in business segments and in the Group’s Executive Board. Best Quality Practices and monitoring the realisation of Quality Best Practices is handled as part of the external system audits. The effectiveness of processes in Wiring Harness business has been measured using harmonised indicators. The development and harmonisation of indicators is continued. Indicators act as tools for continuous improvement and this improves further the quality management in Group level.
MANAGEMENT
The Annual General Meeting held on 31 March 2010, re-elected Outi Lampela, Endel Palla, Olli Pohjanvirta, Matti Ruotsala and Jyrki Tähtinen as Board members, and Matti Hyytiäinen as a new member. In the Board’s organisation meeting, Matti Ruotsala was elected as Chairman of the Board with Jyrki Tähtinen as Vice-Chairman.
Outi Lampela was elected as chairman of the Audit Committee with Matti Hyytiäinen and Olli Pohjanvirta as its members. The Board of Directors also established a Nomination Committee, which shall prepare the matters pertaining to the nomination and remuneration of directors and elected Matti Ruotsala as chairman of the Nomination Committee and Endel Palla and Jyrki Tähtinen as members.
Authorised public accounting firm KPMG Oy Ab, which has announced Virpi Halonen, APA, to be the Auditor with principal responsibility, was selected as auditor.
Since 15 March 2010 the Group’s Executive Board has consisted of the following persons: Harri Suutari, Chairman (President and CEO); Harri Ojala (President, Wiring Harnesses); Jarmo Rajala (President, Electronics); Sanna Raatikainen (General Counsel); Marja Sarajärvi (CFO); and Jarkko Kariniemi (Director, HR and Risk Management).
SHARE TURNOVER AND SHAREHOLDERS
PKC Group Oyj’s share turnover on NASDAQ OMX Helsinki Ltd from 1 January to 31 December 2010 was 10,172,914 shares (8,665,356 shares), representing 56.5% of the average number of shares (48.7%). Shares were traded to a total value of EUR 107.7 million (EUR 37.8 million). The lowest share value during the financial year was EUR 6.55 (EUR 2.70) and the highest EUR 15.58 (EUR 6.83). The closing price on the last trading day of the financial year was EUR 15.40 (EUR 6.60) and the average price during the period was EUR 10.72 (EUR 4.38). The company’s market capitalisation at 31 December 2010 was EUR 301.1 million (EUR 117.4 million).
Flaggings 2010:
- The share of votes and share capital in PKC Group Oyj held by Ilmarinen Mutual Pension Insurance Company (Business ID 0107638-1) exceeded the limit of 5% on 18 February 2010, after which Ilmarinen Mutual Pension Insurance Company owned 969,685 shares i.e. 5.45% of shares and votes.
- The share of votes and share capital in PKC Group Oyj held by corporations in which OP-Pohjola Group Central Cooperative (0242522-1) exercises influence, its subsidiaries and funds managed by its subsidiaries (OP-Suomi Pienyhtiöt, OP-Pohjola Pienyhtiöt, OP-Focus) exceeded the limit of 5% on 23 February 2010, after which they owned a total of 908,467 shares i.e. 5.11% of shares and votes.
- The share of votes and share capital in PKC Group Oyj held by Jorma Takanen fell below the limit of one twentieth (1/20) on 23 April 2010, after which Jorma Takanen owned 807,598 shares i.e. 4.54% of shares and votes.
- The share of votes and share capital in PKC Group Oyj held by corporations in which OP-Pohjola Group Central Cooperative (0242522-1) exercises influence, its subsidiaries and funds managed by its subsidiaries (OP-Suomi Pienyhtiöt) fell below the limit of 5% on 9 September 2010. After notification thereof on 28 September 2010 they owned a total of 840,015 shares i.e. 4.72% of shares and votes.
The shares held by Board members, their closely associated persons and corporations in which they have a controlling interest accounted for 0.7% (0.7%) of the total number of shares at the end of the financial year. PKC Group Oyj had a total of 7,207 shareholders (7,336) at the end of the financial year. The shares held by foreigners and through nominee registrations at the close of the financial year totalled 19.8% of the share capital (15.5%).
SHARES AND SHARE CAPITAL
PKC Group Oyj’s shares and share capital has changed during the financial year as follows:
- A total of 1,770,000 new shares were subscribed for in the directed share issue resolved by the Board of Directors on 15 November 2010. The share issue was based on the authorisation granted to the Board of Directors. New shares were registered with the Trade Register on 19 November 2010 and were traded on NASDAQ OMX Helsinki Ltd together with the old shares as of the same date. Share subscription price was recognised in parent company’s Invested non-restricted equity fund. Following the share issue, the Company had a total of 19,551,522 shares and votes.
- A total of 410 PKC Group Oyj’s shares have been subscribed for with 2006 A options. The new shares and the corresponding increase in the share capital, EUR 139.40, have been entered into the Trade Register on 30 November 2010. The new shares were traded on the main list of the NASDAQ OMX Helsinki Ltd as of 1 December 2010. After the increase the Company’s registered share capital was EUR 5,982,727.36, divided into 19,551,932 shares.
After the balance sheet date PKC Group Oyj’s shares and share capital has changed as follows:
- a total of 49,400 PKC Group Oyj’s shares have been subscribed for with 2006 options (31,600 with 2006A options and 17,800 with 2006B options). The new shares and the corresponding increase in the share capital, EUR 16,796, have been entered into the Trade Register on 1 February 2011. The new shares were traded on the main list of the NASDAQ OMX Helsinki Ltd together with the old shares as of 2 February 2011. After the increase the Company’s registered share capital was EUR 5,999,523.36, divided into 19,601,332 shares.
Currently the Company’s registered share capital is EUR 5,999,523.36, divided into 19,601,332 shares.
THE BOARD'S AUTHORISATIONS
The Board of Directors was 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 and 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. Following the directed share issue decided on 15 November 2010, the total number of shares to be offered or subscribed under this authorisation may not exceed 1,730,000.
The Board of Directors does not possess a valid authorisation to acquire company’s own shares, and the company does not have any own shares (treasury shares) in its possession.
STOCK OPTION SCHEMES
2006 options
The stock option scheme initiated in 2006, comprises a total of 697,500 options divided into A, B and C warrants. At the close of financial year, the outstanding options and options held by key personnel totals 202,090 2006A warrants, 232,500 2006B warrants and 260,850 2006C warrants.
The share subscription price for the 2006 stock options is the volume-weighted average price of the PKC Group Oyj share on NASDAQ OMX Helsinki, with dividend adjustments, as defined in the stock option terms (at present, EUR 10.09 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 237,150. After the registration of subscription on 1 February 2011, the Company’s share capital can increase by a maximum of 647,690 shares i.e. EUR 220,214.60 as a result of the exercise of the remaining outstanding option rights. The share subscription period is for 2006A warrants 1 April 2009 – 30 April 2011, for 2006B warrants 1 April 2010 – 30 April 2012, and for 2006C warrants 1 April 2011 – 30 April 2013. The 2006 stock options 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.
2009 options
The Annual General Meeting held on 27 March 2009 decided to issue stock options to key personnel in the company and its subsidiaries. The maximum total number of stock options issued is 600,000 and they are divided into A, B and C warrants. At the close of the financial year, the outstanding options and options held by key personnel totals 200,000 2009A and 200,000 2009B warrants.
The subscription price for shares through the exercise of the 2009 stock options is the volume-weighted average price of the PKC Group Oyj share on NASDAQ OMX Helsinki for April 2009, 2010 and 2011 + 20% with dividend adjustments, (at present, EUR 3.45 for the 2009A warrants and EUR 13,26 for the 2009B warrants). The subscription price for shares will be recorded in the invested non-restricted equity fund. The stock options entitle their owners to subscribe for a maximum total of 600,000 new shares in the company or existing shares held by the company. The share subscription period for 2009A warrants is 1 April 2012 — 30 April 2014, for 2009B warrants 1 April 2013 — 30 April 2015 and for 2009C warrants 1 April 2014 — 30 April 2016. The 2009 stock options 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.
SHORT-TERM RISKS AND UNCERTAINTIES
Due to the global growth in industrial production, the prices of raw materials and components have developed in an unfavourable direction, particularly in the latter half of 2010. The same development has continued in early 2011 and may continue unfavourably.
There were problems with the availability of components in 2010, and component availability problems may increase PKC’s processing and freight costs this year.
A potential weakening of the euro against the Polish zloty and the Russian rouble may increase PKC’s processing costs calculated in euros.
The principles, objectives and organisation of the company’s risk management as well as key risk areas are described in the risk management section of the Corporate Governance guidelines, which are available on the company's website at www.pkcgroup.com.
OUTLOOK FOR THE FUTURE
The number of orders received by our automotive industry customers during the final quarter exceeded the number of vehicles they delivered within the same period. The industry is anticipating significant growth this year on the recovering European and North American markets. Markets in the developing countries are also expected to keep growing. Based on this, we are expecting an increase in the net sales of the Wiring Harnesses segment compared to last year. Customers in the industrial electronics and energy segment steadily increased their sales last year, and we expect this growth to continue. We also estimate that the net sales generated by the electronics design and manufacturing services will increase this year. PKC Group estimates that its net sales and comparable operating profit will increase in 2011 from the previous year’s level. In 2010, net sales amounted to EUR 316.1 million, and operating profit before non-recurring items was EUR 31.5 million.
THE BOARD OF DIRECTORS’ PROPOSAL FOR THE DISPOSAL OF PROFITS
The parent company’s distributable funds are EUR 67.8 million, of which the net profit for the financial year is EUR 2.0 million. The Board of Directors will propose to the Annual General Meeting to be held on 30 March 2011 that a dividend of EUR 0.55 per share be paid for a total of EUR 10.8 million (calculated with the number of shares at the balance sheet date) and that the remainder of the distributable funds be transferred to shareholders’ equity. The record date for the dividend payout is 4 April 2011 and the payment date is 11 April 2011. In the view of the Board of Directors, the proposed dividend payout will not put the company’s liquidity at risk.
ANNUAL REPORT 2010 AND CORPORATE GOVERNANCE STATEMENT
PKC will publish its Annual Report for 2010, which contains the report by the Board of Directors and financial statements, auditor’s report and a separate corporate governance statement on 8 March 2011 on its website at www.pkcgroup.com.
ANNUAL GENERAL MEETING AND FINANCIAL REPORTS IN 2011
The Annual General Meeting of PKC Group Oyj will be held on Wednesday 30 March 2011.
In 2011, the Interim Reports will be published as follows:
Interim Report 1-3/2011 on Thursday 5 May 2011 at 8:15 a.m.
Interim Report 1-6/2011 on Thursday 4 August 2011 at 8:15 a.m.
Interim Report 1-9/2011 on Thursday 3 November 2011 at 8:15 a.m.
The text section of this financial statement release focuses on the annual accounts. Comparisons in accordance with IFRS standards have been made to the figures in 2009 unless otherwise mentioned. The figures presented in the tables are independently rounded figures.
TABLES
The annual figures have been audited. This financial statement release has been prepared in accordance with IAS 34 (Interim Financial Reporting) standard. The financial statement has been prepared in accordance with the same principles as the annual financial statements for 2009. The year 2010 IFRS standard changes have not had any effect.
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000) | 10-12/10 3 mon. | 10-12/09 3 mon. | 1-12/10 12 mon. | 1-12/09 12 mon. |
| NET SALES | 91,940 | 55,390 | 316,081 | 201,814 |
| Other operating income | 1,139 | 753 | 4,597 | 2,253 |
| Increase (+) / decrease (--) in stocks of finished goods and work in progress | 3,639 | -1,298 | 5,983 | -9,319 |
| Materials and services | 56,689 | 29,343 | 190,940 | 106,346 |
| Employee benefit expenses | 19,210 | 13,529 | 66,442 | 53,384 |
| Depreciation | 2,483 | 2,606 | 10,684 | 10,982 |
| Other operating expenses | 8,559 | 6,735 | 28,906 | 23,355 |
| OPERATING PROFIT/LOSS | 9,776 | 2,632 | 29,689 | 682 |
| Interest expenses | -742 | -427 | -1,964 | -2,527 |
| Other financial income | 41 | 1,039 | 132 | 2,949 |
| Other financial expenses | -2,437 | -1,420 | -2,829 | 0 |
| PROFIT/LOSS BEFORE TAXES | 6,639 | 1,824 | 25,029 | 1,103 |
| Income tax | -1,366 | 1,421 | -5,346 | 1,246 |
| PROFIT/LOSS FOR THE REPORT PERIOD | 5,272 | 3,244 | 19,683 | 2,349 |
| Other comprehensive income: | ||||
| Foreign currency translation differences - foreign operations | 5,241 | 1,062 | 10,499 | 443 |
| Total comprehensive income for the period | 10,513 | 4,307 | 30,182 | 2,792 |
| Attributable to equity holders of the parent company: | ||||
| Basic earnings per share (EPS), EUR | 0.29 | 0.18 | 1.09 | 0.13 |
| Diluted earnings per share (EPS), EUR | 0.29 | 0.19 | 1.09 | 0.14 |
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 1,000) | 12/10 | 12/09 |
| ASSETS | ||
| NON-CURRENT ASSETS | ||
| Goodwill | 15,662 | 13,794 |
| Other intangible assets | 9,196 | 11,955 |
| Property, plant and equipment | 36,232 | 34,378 |
| Deferred tax assets | 4,794 | 4,804 |
| Other receivables | 38 | 64 |
| Total non-current assets | 65,923 | 64,995 |
| CURRENT ASSSETS | ||
| Inventories | 58,127 | 36,066 |
| Receivables | ||
| Trade receivables | 45,797 | 35,170 |
| Other receivables | 12,005 | 8,291 |
| Total receivables | 57,803 | 43,460 |
| Cash and cash equivalents | 37,104 | 15,326 |
| Total current assets | 153,034 | 94,852 |
| Total assets | 218,956 | 159,847 |
| EQUITY AND LIABILITIES | ||
| EQUITY | ||
| Share capital | 5,983 | 5,983 |
| Share premium account | 4,850 | 4,862 |
| Invested non-restricted equity fund | 21,852 | 370 |
| Translation reserve | 958 | -1,253 |
| Share-based payments | 1,663 | 1,052 |
| Retained earnings | 68,789 | 65,263 |
| Profit/loss for the report period | 19,683 | 2,349 |
| TOTAL EQUITY | 123,776 | 78,626 |
| LIABILITIES | ||
| Non-current liabilities | ||
| Interest-bearing liabilities | 26,097 | 34,630 |
| Non-interest-bearing liabilities | ||
| Provisions | 472 | 376 |
| Deferred tax liabilities | 4,804 | 3,103 |
| Total non-current liabilities | 31,373 | 38,110 |
| Current liabilities | ||
| Interest-bearing liabilities | 8,939 | 8,940 |
| Trade payables | 33,291 | 16,059 |
| Other non-interest-bearing liabilities | 21,577 | 18,112 |
| Total current liabilities | 63,807 | 43,111 |
| Total liabilities | 95,180 | 81,221 |
| TOTAL EQUITY AND LIABILITIES | 218,956 | 159,847 |
| CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000) | 1-12/10 12 mon. | 1-12/09 12 mon. |
| Cash flows from operating activities | ||
| Cash receipts from customers | 305,662 | 210,096 |
| Cash receipts from other operating activities | 4,625 | 2,693 |
| Cash paid to suppliers and employees | -284,392 | -163,942 |
| Cash flows from operations before financial income and expenses and taxes | 25,895 | 48,847 |
| Interest paid | -1,915 | -2,527 |
| Translation difference | 857 | -1,725 |
| Interest received and other financial income | 342 | 630 |
| Income taxes paid | -2,244 | -2,817 |
| Net cash from operating activities (A) | 22,935 | 42,408 |
| Cash flows from investing activities | ||
| Acquisition of property and equipment and intangible assets | -8,542 | -3,913 |
| Proceeds from sale of property and equipment and intangible assets | 466 | 178 |
| Investments | 0 | -1,076 |
| Loans granted | -1 | -2 |
| Proceeds from repayments of loans | 17 | 37 |
| Dividends received | ||
| Net cash used in investment activities (B) | -8,060 | -4,776 |
| Cash flows after investments | 14,875 | 37,632 |
| Cash flows from financing activities | ||
| Share issue | 21,708 | 0 |
| Repayment of short-term/long-term borrowings | -8,697 | -32,723 |
| Dividends paid | -7,113 | -2,709 |
| Net cash used in financing activities (C) | 5,898 | -35,432 |
| Net increase (+) or decrease (--) in cash and equivalents (A+B+C) | 20,774 | 2,200 |
| Cash and cash equivalents in the beginning of the period | 15,326 | 12,435 |
| Effect of exchange rate fluctuations | 1,004 | 692 |
| Cash and cash equivalents in the end of the period | 37,104 | 15,326 |
| KEY FINANCIAL INDICATORS | 1-12/10 12 mon. | 1-12/09 12 mon. |
| Net sales, EUR 1,000 | 316,081 | 201,814 |
| Operating profit/loss, EUR 1,000 | 29,689 | 682 |
| % of net sales | 9.4 | 0.3 |
| Profit/loss before taxes, EUR 1,000 | 25,029 | 1,103 |
| % of net sales | 7.9 | 0.5 |
| Net profit/loss for the period, EUR 1,000 | 19,683 | 2,349 |
| % of net sales | 6.2 | 1.2 |
| Return on equity (ROE), % | 19.4 | 3.0 |
| Return on investments (ROI), % | 25.8 | 6.4 |
| Net liabilities, EUR 1,000 | -2,068 | 28,245 |
| Gearing, % | -1.7 | 35.9 |
| Equity ratio, % | 56.5 | 49.2 |
| Current ratio | 2.4 | 2.2 |
| Gross capital expenditure, EUR 1,000 | 8,575 | 3,894 |
| % of net sales | 2.7 | 1.9 |
| R&D expenditures, EUR 1,000 | 5,692 | 5,518 |
| % of net sales | 1.8 | 2.7 |
| Personnel average | 5,039 | 4,478 |
| PER-SHARE KEY INDICATORS | 1-12/10 12 mon. | 1-12/09 12 mon. |
| Earnings per share (EPS), EUR | 1.09 | 0.13 |
| Earnings per share (EPS),diluted, EUR | 1.09 | 0.14 |
| Equity per share, EUR | 6.33 | 4.42 |
| Share price at close of period, EUR | 15.40 | 6.60 |
| Dividend per share, EUR*) | 0.55 | 0.40 |
| Dividend per earnings, %*) | 50.50 | 307.70 |
| Effective dividend yield, %*) | 3.30 | 6.10 |
| Price/earnings ratio (P/E) | 14.10 | 50.80 |
| Lowest share price, EUR | 6.55 | 2.70 |
| Highest share price, EUR | 15.58 | 6.83 |
| Average share price, EUR | 10.72 | 4.38 |
| Turnover in shares, 1,000 shares | 10,173 | 8,655 |
| Turnover in shares per (share issue adjusted) share capital, % | 56.5 | 48.7 |
| Average number of shares, 1,000 shares | 17,990 | 17,782 |
| Average number of shares, diluted, 1,000 shares | 18,054 | 16,690 |
| Shares at end of period, 1,000 shares | 19,552 | 17,782 |
| Market capitalisation, EUR 1,000 | 301,100 | 117,358 |
| *) The figures of 2010 are based on the Board of Director's proposal. |
| 1. SEGMENT INFORMATION | ||||
| 1.1.-31.12.2010 (EUR 1,000) | Wiring Harness | Electronics | Unallocated amounts and eliminations | Group Total |
| Sales to external customers | 242,384 | 73,697 | 316,081 | |
| Sales to other segments | 10,169 | 243 | -10,412 | 0 |
| Net sales, EUR 1,000 | 252,553 | 73,940 | -10,412 | 316,081 |
| Operating profit /loss before non-recurring expenses | 26,260 | 7,691 | -2,452 | 31,499 |
| % of net sales | 10.8 | 10.4 | 10.0 | |
| Non-recurring employee benefit expenses | 1,363 | 0 | 0 | 1,363 |
| Non-recurring inventory write-down | 447 | 0 | 0 | 447 |
| Total non-recurring expenses | 1,810 | 0 | 0 | 1,810 |
| Operating profit/loss | 24,450 | 7,691 | -2,452 | 29,689 |
| % of net sales | 10.1 | 10.4 | 9.4 | |
| Segment’s assets | 151,634 | 52,348 | 10,181 | 214,162 |
| Unallocated assets *) | 4,794 | 4,794 | ||
| Total assets | 151,634 | 52,348 | 14,975 | 218,956 |
| *) Segment’s assets do not include deferred taxes | ||||
| 1.1.-31.12.2009 (EUR 1,000) | Wiring Harness | Electronics | Unallocated amounts and eliminations | Group Total |
| Sales to external customers | 149,316 | 52,497 | 201,813 | |
| Sales to other segments | 227 | 107 | -334 | 0 |
| Net sales, EUR 1,000 | 149,543 | 52,604 | -334 | 201,813 |
| Operating profit /loss before non-recurring expenses | 492 | 4,575 | 5,068 | |
| % of net sales | 0.3 | 8.7 | 2.5 | |
| Non-recurring employee benefit expenses | 2,033 | 0.0 | 0 | 2,033 |
| Non-recurring other operating expenses | 2,353 | 0.0 | 0 | 2,353 |
| Total non-recurring expenses | 4,386 | 0.0 | 0 | 4,386 |
| Operating profit/loss | -3,894 | 4,575 | 682 | |
| % of net sales | -2.6 | 8.7 | 0.3 | |
| Segment’s assets | 100,191 | 43,706 | 11,146 | 155,043 |
| Unallocated assets *) | 4,804 | 4,804 | ||
| total assets | 100,191 | 43,706 | 15,950 | 159,847 |
| *) Segment’s assets do not include deferred taxes | ||||
| NET SALES BY GEOGRAPHICAL LOCATIONS (EUR 1,000) | 10-12/10 3 mon. | 10-12/09 3 mon. | 1-12/10 12 mon. | 1-12/09 12 mon. |
| Finland | 15,513 | 10,508 | 53,720 | 40,494 |
| Other Europe | 43,185 | 25,538 | 154,588 | 99,928 |
| North America | 4,171 | 4,443 | 20,732 | 18,870 |
| South America | 14,408 | 10,478 | 56,958 | 26,526 |
| Other countries | 14,663 | 4,423 | 30,083 | 15,995 |
| Total | 91,940 | 55,390 | 316,081 | 201,814 |
| 2. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR MILLION) | |||||||
| A = Share Capital | |||||||
| B = Share premium account | |||||||
| C = Invested non-restricted equity fund | |||||||
| D = Translation difference | |||||||
| E = Retained earnings | |||||||
| F = Non-Controlling interest | |||||||
| G = Total equity | |||||||
| A | B | C | D | E | F | G | |
| Equity at 1.1.2009 | 6.0 | 4.9 | 0.4 | -3.3 | 70.1 | 0.3 | 78.3 |
| Dividends | 0.0 | 0.0 | 0.0 | 0.0 | -2.7 | 0.0 | -2.7 |
| Share-based payments | 0.0 | 0.0 | 0.0 | 0.0 | 0.3 | 0.0 | 0.3 |
| Comprehensive income for the period | 0.0 | 0.0 | 0.0 | 0.4 | 2.3 | 0.0 | 2.7 |
| Other changes | 0.0 | 0.0 | 0.0 | 0.0 | 0.3 | -0.3 | 0.0 |
| Equity at 31.12.2009 | 6.0 | 4.9 | 0.4 | -2.9 | 70.3 | 0.0 | 78.6 |
| Equity at 1.1.2010 | 6.0 | 4.9 | 0.4 | -2.9 | 70.3 | 0.0 | 78.6 |
| Dividends | 0.0 | 0.0 | 0.0 | 0.0 | -7.1 | 0.0 | -7.1 |
| Share-based payments | 0.0 | 0.0 | 0.0 | 0.0 | 0.6 | 0.0 | 0.6 |
| Subscription of shares | 0.0 | 0.0 | 21.4 | 0.0 | 0.0 | 0.0 | 21.4 |
| Comprehensive income for the period | 0.0 | 0.0 | 0.0 | 10.5 | 19.7 | 0.0 | 30.2 |
| Equity 31.12.2010 | 6.0 | 4.9 | 21.8 | 7.6 | 83.5 | 0.0 | 123.8 |
| 3. PROPERTY, PLANT AND EQUIPMENT (EUR 1,000) | 12/10 | 12/09 |
| Acquisition cost 1.1. | 73,772 | 75,526 |
| +/- Translation difference 1.1. | 1,421 | -56 |
| + Additions | 11,128 | 11,561 |
| - Disposals | -9,352 | -13,260 |
| Acquisition cost 31.12. | 76,969 | 73,772 |
| Accumulated depreciation 1.1. | 39,395 | 40,597 |
| +/- Translation difference 1.1. | -499 | -4 |
| - Accumulated depreciation on disposals | -5,335 | -8,726 |
| + Depreciation | 7,132 | 7,527 |
| - Exchange difference | 44 | 0 |
| Depreciation 31.12. | 40,736 | 39,394 |
| Carrying amount 31.12. | 36,232 | 34,378 |
| 4. OTHER INTANGIBLE ASSETS (EUR 1,000) | 12/10 | 12/09 |
| Acquisition cost 1.1. | 37,169 | 32,056 |
| +/- Translation difference 1.1. | 1,290 | 0 |
| + Additions | 1,177 | 5,214 |
| - Disposals | 0 | -101 |
| Acquisition cost 31.12. | 39,636 | 37,169 |
| Accumulated depreciation 1.1. | 11,420 | 8,052 |
| +/- Translation difference 1.1. | 92 | 0 |
| - Accumulated depreciation on disposals | -308 | -85 |
| + Depreciation | 3,552 | 3,453 |
| - Exchange difference | 22 | 0 |
| Depreciation 31.12. | 14,778 | 11,420 |
| Carrying amount 31.12. | 24,858 | 25,749 |
| 5. CONTINGENT LIABILITIES AT END OF PERIOD (EUR 1,000) | 12/10 | 12/09 | ||
| Leasing liabilities | 2,982 | 3,027 | ||
| Liabilities for derivative instruments | ||||
| Nominal values | ||||
| Currency derivatives | ||||
| Forward contracts | 0 | 0 | ||
| Copper derivatives | ||||
| Forward contracts | 2,010 | 1,187 | ||
| Total | 2,010 | 1,187 | ||
| Fair values | ||||
| Currency derivatives | ||||
| Forward contracts | 0 | 0 | ||
| Copper derivatives | ||||
| Forward contracts | 307 | 83 | ||
| Total | 307 | 83 | ||
| Currency and copper derivates are used only in hedging currency and copper 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. | ||||
| 6. QUARTERLY KEY INDICATORS, CONSOLIDATED | 7-9/09 3 mon. | 10-12/09 3 mon. | 1-3/10 3 mon. | 4-6/10 3 mon. | 7-9/10 3 mon. | 10-12/10 3 mon. |
| Net sales, EUR million | 46.8 | 55.4 | 60.8 | 81.0 | 82.3 | 91.9 |
| Operating profit/loss, EUR million | 3.5 | 2.6 | 2.8 | 7.6 | 9.5 | 9.8 |
| % of net sales | 7.6 | 4.8 | 4.6 | 9.4 | 11.5 | 10.6 |
| Profit/loss before taxes, EUR million | 5.7 | 1.8 | 0.4 | 4.7 | 13.4 | 6.6 |
| % of net sales | 12.2 | 3.3 | 0.6 | 5.8 | 16.2 | 7.2 |
| Equity ratio, % | 46.7 | 49.2 | 46.1 | 47.7 | 50.2 | 56.5 |
| Earnings per share (EPS), diluted (EUR) | 0.39 | 0.19 | 0.01 | 0.24 | 0.56 | 0.29 |
| Equity per share, EUR | 4.20 | 4.42 | 4.47 | 4.95 | 5.15 | 6.33 |
| QUARTERLY KEY INDICATORS, WIRING HARNESS | ||||||
| Net sales, EUR million | 34.2 | 40.3 | 45.7 | 64.1 | 61.8 | 70.8 |
| Operating profit/loss, EUR million | 2.0 | 1.0 | 2.0 | 7.0 | 6.8 | 8.7 |
| % of net sales | 5.9 | 2.4 | 4.4 | 10.9 | 11.0 | 12.3 |
| QUARTERLY KEY INDICATORS, ELECTRONICS | ||||||
| Net sales, EUR million | 12.7 | 15.1 | 15.1 | 16.9 | 20.5 | 21.1 |
| Operating profit/loss, EUR million | 1.5 | 1.7 | 1.3 | 1.1 | 3.3 | 2.0 |
| % of net sales | 12.2 | 12.2 | 8.6 | 6.5 | 15.9 | 9.6 |
CALCULATION OF INDICATORS
Return on equity (ROE), %
= 100 x (Profit/loss) / Shareholders’ equity (average)
Return on investments (ROI), %
= 100 x (Profit before taxes + financial expenses) / Shareholders’ equity + interest-bearing liabilities (average)
Gearing, %
= 100 x (Interest-bearing liabilities – cash and cash equivalents and investments) / Shareholders’ equity + non-controlling interests
Equity ratio, %
= 100 x (Shareholders’ equity + non-controlling interests) / Total of statement of financial position – advance payments received
Quick ratio
= Receivables and cash and cash equivalents / Current liabilities – advance payments received
Current ratio
= Receivables and cash and cash equivalents + inventories / Current liabilities
Earnings per share (EPS), EUR
= Profit/loss +/- non-controlling interests / Average share issue-adjusted number of shares
Shareholders’ equity per share, EUR
= Shareholders’ equity / Share issue-adjusted number of shares at the date of the statement of financial position
Market capitalisation
= Number of shares at the end of the financial period x the last trading price of the financial period
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, +358 400 384 937
PRESS CONFERENCE
A press conference on the financial statement will be arranged for analysts and investors today, 17 February 2011, at 10.00 a.m., at the address World Trade Center, Aleksanterinkatu 17, meeting room 2, 2nd floor, Helsinki.
DISTRIBUTION
NASDAQ OMX
Main media
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, Poland, Estonia and Russia. The Group's net sales in 2010 totalled EUR 316.1 million. PKC Group Oyj is listed on NASDAQ OMX Helsinki Ltd.
