Nürnberg –LEONI AG, Nuremberg, continues to be a growing company. The wire, cable and wiring systems supplier has not been affected largely by the overall slack economic situation. Group turnover increased in the first three quarters to 818 mill. Euro, which is 15 % more than in the previous year (711 mill. Euro). Ex-cluding the companies consolidated for the first time, the growth still amounts to about 10 %. Thus, LEONI AG has come very close in reaching the billion Euro turnover target it is aiming at for 2001. Profit figures have increased by a disproportionate amount to turnover. Profit on ordinary activities increased to about 36 mill. Euro which is the equivalent of an increase of roughly 35 % compared to the previous year (2000: 27 mill. Euro). Besides this successful course in business activities, LEONI has also succeeded in establishing a foothold with another top-quality automobile manufacturer – BMW has nominated LEONI as a supplier for development work and for mass production runs. From 2004 onwards LEONI will be supplier to the BMW Group.
The three quarter results of the Wiring Systems Division, which is the division strongest in turnover of the LEONI AG, are very positive. Turnover was about 410 mill. Euro, an in-crease of about 14 % more than in the previous year (359 mill. Euro). This figure is accounted for by the constant high demand for the vehicles supplied for by LEONI – especially the successful models of the LEONI customers DaimlerChrysler, Audi/VW, Porsche and General Motors. In addition, following the conclusion of the restructuring, the business with our English buyers is on the up again. It is only the business in North America and South America which is still unsatisfactory due to the current economic situation. As a result of the partially very good levels of capacity utilisation and as a result of numerous improvements to systems and work-flows, the Wiring Systems Division managed to make a significant contribution to group results.
Cable Division continues to report biggest growth
The Cable Division has grown the most. It increased its turnover by 26 % to 329 mill. Euro (2000: 261 mill. Euro). It was chiefly the positive developments in the automation and medical technology sectors of industry, the conversion of Telekom networks to the new ADSL technology as well as the automotive wires unit which accounted for this growth. As a result of the division’s leading market position, it managed to grow significantly in spite of the rather weak economic situation in the automotive industry. The Cable Division also contributed considerably to the improvement in results, above all with the businesses it acquired over the last two years and the very good level of capacity utilisation in many sectors.
Wire Division hit by weak US economic situation
Wire, the smallest LEONI division, is the only one reporting unsatisfactory results. This however can be compensated for by the positive business results for cable and wiring systems. The turnover in the Wire Division has dropped again and amounted to 79 mill. Euro on 30.09., which is almost 13 % less than in the previous year (91 mill. Euro). This decrease is directly attributable to a sharp fall in demand for wires and stranded conductors for information and communication technology as well as for aeroplane construction from countries other than Germany. The business in the USA has been hit particulary hard by this, however, the results of this trend are also felt in Europe.
Positive outlook despite slackening of economic activity
LEONI continued to invest a considerable amount in order to pave the way for future growth. About 68 mill. Euro were invested in the first nine months of 2001 in the setting up of a new wire and cable site in Poland, the expansion of the wiring systems site in Poland and the extension of the cable plant in Mexico.
LEONI was able to secure several positive perspectives for the future. Possible adverse effects of the overall unsatisfactory economic situation are thus expected to be less severe. LEONI’s wiring systems business activities, as a supplier to high quality vehicles and consequently those vehicles are less exposed to the ups and downs of economic cycles, continue to be stable. The business with suppliers to the automotive industry is also most encouraging. Preparations for two major orders, the successor to the Mercedes A-class and the GM Astra/Zafira, are well underway. At present, the setting up of two new sites, one in Romania and one in the Ukraine, are in the preparing stage.
Very positive results in China business
The Cable Division will be able to make a significant contribution to turnover in the future through the increase of its capacity by a factor of three in the cable plant in Mexico. The preparations for the construction fo a new cable plant in China are progressing as scheduled. There the division shall produce special cable for mobile phone networks from 2002 onwards. Demand for these cables is very high for the expansion of the mobile phone infrastructure in China. Business activities of the Wire Division with China are also so very positive that capacities will have to be expanded. However, an improvement of the economic situation in the USA is not expected prior to the second half of 2002.
One billion Euro mark in turnover realistic target
Taking into consideration the currently very positive business developments, LEONI AG is certain to exceed the billion Euro turnover target it is aiming at for 2001. It shall also be able to achieve net annual profit considerable in excess of the one earned in the previous year. As a result of this, it shall have the room for manoeuvre necessary to increase the dividend. LEONI AG further expects an additional increase in turnover in 2002. În any case, the group plans to achieve another improvement in profitability at a more than proportional rate to turnover.
