Nuremberg – Leoni, the leading provider of cable systems to the automotive sector and other industries, recorded consolidated sales of EUR 531.1 million in the third quarter of 2009 (previous year: EUR 734.9 million). The MDAX-listed company thus stabilised its business further despite the extended summer holiday plant shutdowns of many vehicle manufacturers. Leoni’s earnings situation improved significantly during the year due to the rapidly and resolutely implemented cost reduction programme: from the beginning of July to the end of September 2009 the Company generated consolidated earnings before interest and taxes (EBIT) of EUR 5.5 million (previous year: EUR 24.2 million), having still recorded losses in the two preceding quarters. The adjusted EBIT amounts to EUR 11 million (previous year: EUR 28.2 million).

Leoni’s consolidated sales amounted to EUR 1,553.8 million in the first nine months of 2009 (EUR 2,325.6 million in the previous year). EBIT in this period came to a negative amount of EUR 72.3 million (previous year: profit of EUR 95.7 million). Included in this were restructuring costs, impairment charges from the second quarter and the impact of allocating the purchases prices of earlier acquisitions, which together incurred expenses of EUR 42 million. Adjusted for these factors, EBIT for the first three quarters of 2009 came to a negative figure of EUR 30.3 million (a positive figure of EUR 112.8 million in the previous year). The net loss of came to EUR 92.1 million (previous year: net income of EUR 55.9 million).

Sales on target

For fiscal 2009 as a whole, Leoni still forecasts consolidated sales of between EUR 2.1 and 2.2 billion. The duration of the carmakers’ plant holiday shutdowns in December will be crucial to fourth quarter business performance. The Company now expects moderately positive, adjusted EBIT in the second half of 2009 even if only a sales figure of EUR 2.1 billion is reached over the year as a whole. The cost reduction measures will be ongoing as announced in order to further improve the starting position for 2010. As budgeted, this will once more incur substantial restructuring expenses of about EUR 28 million by the end of the year. For 2010 Leoni expects, in a somewhat more upbeat economic setting, on the whole to outperform its key markets and to be able to achieve a sales increase of about 10 percent.

Earnings improved in both divisions

The signs of recovery have recently multiplied in both of Leoni’s business divisions. The Wiring Systems division generated external sales of EUR 294.9 million in the third quarter (previous year: EUR 366.4 million) and, after three loss-making quarters, a breakeven EBIT-level result again (previous year: earnings of EUR 6.9 million). The factors exerting a positive effect included having started supplying the new Opel Astra with wiring systems. The division also received further new and follow-on orders from the international motor vehicle industry, among others for the first time from a Japanese manufacturer: from the end of 2010 Leoni will equip the Nissan X-Trail for the Russian market with cable systems.

The Wire & Cable Solutions division recorded external sales of EUR 236.2 million from the beginning of July to the end of September 2009 (previous year: EUR 368.5 million) and positive EBIT of EUR 6.3 million (previous year: EUR 15.3 million). This partially offset the losses incurred in the first two quarters of 2009. Above all, business involving automotive and standard cables as well as household appliance cables picked up appreciably again. Furthermore, Leoni underpinned its good position in the solar industry growth market with a project that points the way to the future: equipping the world’s second-largest photovoltaic power plant with special cables.

Adjustment in the workforce structure

Leoni employed a total of 47,652 people at the end of September 2009, i.e. 5,821 fewer people than at the same time one year earlier. This decrease was due above all to having cut production jobs at the end of 2008 and in the first half of 2009. The revival of business in the third quarter has already led to recruitment again at some production facilities. By contrast, the Company continued to apply its austerity measures in administrative areas, primarily so in Western Europe, and the relocation of production to countries with lower wage levels to adjust cost structures to the reduced level of sales. In Germany Leoni had 3,833 employees on 30 September of the current year (previous year: 4,275). The workforce outside Germany decreased to 43,819 employees (previous year: 49,198).

Leoni performance overview

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The entire quarterly financial report can be downloaded here.