PKC Group Financial Statement Release January-Dece

PKC Group Plc       Financial Statement Release   9 February 2017   8.15 a.m.

PKC Group Financial Statement Release January-December 2016

Dividend proposal

• Motherson Sumi Systems Limited’s voluntary public tender offer announced in January 19, 2017 is recommended by the Board of Directors and should the offer be completed no dividend shall be paid.
• Dividend proposal is EUR 0.70 per share (EUR 0.70 per share) conditional upon Motherson Sumi Systems Limited’s voluntary public tender offer having not been completed.

Matti Hyytiäinen, President & CEO:

In the financial year 2016, PKC achieved the set operational targets. Revenue from the company’s continuing business operations remained at the level of the previous year at 846 EUR million (847 EUR million), whilst its comparable EBITDA from continuing business operations increased to 64 EUR million (59 EUR million).

The key projects in the 2016 financial year focused on the implementation of our growth strategy.

• The rolling stock business acquired in 2015 was successfully integrated as part of PKC. The rolling stock business began strongly profitable growth during the financial year, one sign of which was the global framework agreement concluded with Bombardier Transportation.
• Expansion into the Chinese truck market made progress. Together with PKC’s Chinese team, the management of the Huakai-PKC joint venture that began operations in 2015 demonstrated excellent skill in combining PKC’s production expertise with the requirements of Huakai’s customers. The result was profitable and growing business. During the financial year, we established a joint venture with the JAC Group of China. This joint venture is expected to start operations by the end of Q2/17.
• In Europe, the reorganisation of plants and production reached a conclusion by the end of the financial year. PKC now has at its disposal a competitive and modern production network to serve the needs of its customers.

PKC’s market position remained strong in all product and geographical areas of operation throughout the financial year. This achievement would not have been possible without the excellent professional skill of PKC’s personnel. For this I would like to express my warmest thanks to all those working at PKC.

In 2017, we expect the market environment to be fluctuating. The production of trucks in North America is forecast to decline further. In Europe, production volumes are expected to remain the same. With regard to the Brazilian market, we are cautious and we believe that production volumes will remain at the level of the previous year. In China, truck production is expected to remain on the same level but, from PKC’s point of view, what is essential is the continued rise in average prices brought about by increasing complexity of electrical distribution systems. The rolling stock market is expected to grow, and the order books of PKC’s rolling stock customers are on a good level.

In January 2017 Motherson Sumi Systems Limited published voluntary public tender offer for all PKC shares and option rights. By combining both companies the target is to create world leading wiring harness and component company to serve transportation industry. This is exciting development for our company and employees, offering us new opportunities in many areas.

Events after the financial year

Motherson Sumi Systems Limited’s public tender offer

Motherson Sumi Systems Limited launches a voluntary recommended public tender offer for all shares and stock options in PKC Group Plc, which was announced on 19 January 2017. The target is to combine the two companies and create a leading supplier of wiring systems and components for the worldwide transportation industry. The Finnish Financial Supervisory Authority has on 3 February 2017 approved the tender offer document relating to the Tender Offer. The offer period for the Tender Offer will commence on February 6, 2017 at 9:30 a.m. (Finnish time) and expire on March 21, 2017 at 4:00 p.m. (Finnish time), unless the offer period is extended or any extended offer period is discontinued

The divestment of PKC Electronics business

On 27 January PKC Group announced the divestment of PKC Electronics to Enics AG. The divestment is expected to be completed during the first quarter of 2017.

Market outlook

In 2017 the production of heavy-duty and medium-duty trucks in both in Europe and China is expected to remain at the same level as in 2016. In 2017 the production of heavy-duty and medium-duty trucks in North America is expected to decrease by about 7% compared to 2016 and the decrease is expected mainly to take place in heavy-duty trucks. In 2017 the production of heavy-duty and medium-duty trucks in Brazil is expected to remain on the level of previous year. The demand for the rolling stock is expected to continue to grow steadily.

PKC Group’s outlook for 2017

PKC Group estimates that with prevailing exchange rates 2017 revenue and comparable EBITDA will be in the same order of magnitude as in 2016. This estimate includes the negative impact of lower North American heavy duty truck production volumes and the divestment of some light vehicle programs which took place in fourth quarter of 2016. In 2016, PKC’s revenue from continuing operations was EUR 845.7 million and comparable EBITDA from continuing operations was EUR 64.4 million.

PKC Group Plc

Board of Directors

Matti Hyytiäinen

President & CEO

For additional information, contact:

Matti Hyytiäinen, President & CEO, tel. +358 (0)400 710 968

Press conference

A press conference on the financial statement will be arranged for analysts and investors today, 9 February 2017, at 10.00 a.m., at the address Event Arena Bank, Unioninkatu 20, Helsinki.

Attachment

PKC Financial Statement Release 2016

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, Finland, Germany, Lithuania, Mexico, Poland, Russia, Serbia and the USA. The Group's revenue from continuing operations in 2016 totalled EUR 846 million. PKC Group Plc is listed on Nasdaq Helsinki.