Financial Overview

(in million euro)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	Rate of change (%)	Factors
Overall
Sales	884.0	928.2	(4.8)	-
Operating profit	30.5	43.5	(29.9)	-
Wiring Systems
Sales	820.3	858.8	(4.5)	1)
Operating profit	34.5	47.1	(26.8)
Electronics
Sales	63.7	69.4	(8.2)	2)
Operating profit	4.1	0.8	412.5

Factors

1) Wiring Systems
-In FY ended Dec. 31, 2013, net sales decreased 4.5% to 820.3 million euros due to the effect of exchange rate changes and lower North American truck production volumes..

2) Electronics
-In FY ended Dec. 31, 2013, net sales decreased 8.2% to 63.7 million euros.

Outlook for FY ending Dec. 31, 2014

-The Company estimates that 2014 revenue and comparable EBITDA will be lower than in 2013.

-Production of heavy-duty trucks in Europe is expected to decline by 4% in 2014, and production of medium-duty trucks by 3% compared to the previous year. Production of heavy-duty trucks in North America is expected to increase by 10%, production of medium-duty trucks by 5% and production of light vehicles by 2% compared to 2013.

Reorganization

-In Jan. 2014, the Company decided to close the factory in Nogales, Mexico in order to further adapt and align its manufacturing capacity to the North American customer base. The Nogales production shall be transferred to PKC's existing facility in Torreon, Mexico. Currently, Nogales employs approximately 700 persons. These measures are expected to be completed in 2014. (From a press release on January 7, 2014)

-In Dec. 2013, the Company's wiring systems businesses in Europe and South America shall be consolidated under the same leadership as of 1 January 2014. (From a press release on December 20, 2013)

-In Feb. 2013, the Company decided to close the operations in Ireland and transfer its production to Group's existing facilities in Torreon, Mexico and Barchfeld, Germany. In addition, PKC Group is studying the options for its metal stamping manufacturing site in Traverse City, Michigan, USA, including the potential sale of the business and its operations. These measures are expected to be completed by the end of 2013. Currently, Ireland and Traverse City operations employ approximately 70 persons. (From a press release on February 14, 2013)

Partnership

-In Sept. 2013, the Company announced that it has signed a Framework Agreement for Strategic Cooperation with China National Heavy Duty Truck Group Company Limited (SINOTRUK). Under the preliminary agreement, PKC and SINOTRUK desire to explore certain forms of cooperation in connection with the manufacturing of wiring systems, which include setting up a joint venture in China and signing a long term supply agreement subject to further negotiations. The joint venture would manufacture wiring systems for SINOTRUK and possibly also for other customers in China and abroad. (From a press release on September 9, 2013)

R&D Expenditures

(in million euros)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011
Overall	8.5	8.0	6.9
% of sales　(%)	1.0	0.9	1.3
Employees in product development	156	165	143

-In Feb. 2013, the Company is establishing NPI-centers (New Program Introduction-centers) in Keila, Estonia and Curitiba, Brazil. In North America, PKC Group already has a NPI-center in Acuna, Mexico. The objective of the NPI-centers is to ensure seamless customer program ramp-ups from the early design phases to the final, full mass production phase. In addition, the NPI-centers can be utilized to introduce new, improved manufacturing processes to PKC and its customers. The establishment of NPI-centers is expected to be completed by the end of 2013. (From a press release on February 14, 2013)

Capital Expenditures

(in million euros)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011
Overall	14.6	16.0	101.6
% of sales　(%)	1.7	1.7	18.5

-In Oct. 2013, the Company decided to establish a new wiring systems factory in Smederevo, Serbia. The objective is to start manufacturing first in already existing premises in the start of 2014 and in new premises to be constructed for PKC in the end of 2014. The total capital expenditure by the end of 2016 is estimated to be about eight million euros. The factory is expected to employ about 1,500 employees by the end of 2016. The objective is to start production transfers from Group's existing European facilities to new factory in 2014. (From a press release on October 18, 2013)