Nuremberg, 21 March 2007 – Leoni AG expanded substantially in the 2006 financial year, and either met or even exceeded its set targets. In line with the preliminary figures provided earlier, consolidated external sales rose by about 36 percent to EUR 2.11 billion (2005: EUR 1.55 billion). Roughly 28 percent of this strong increase was the result of organic growth, with acquisitions and the increased price of copper accounting for about 36 percent each. Consolidated earnings before interest and taxes were up by nearly 27 percent to EUR 130.2 million (2005: 102.8). Net income rose by around 41 percent to EUR 79.3 million (2005: 56.1). This includes once-off income of EUR 4.8 million from having capitalised a corporate tax credit balance. The earnings-boosting factors were above all the larger volume of business and the increased proportion of output involving more value creation. Free cash flow before acquisitions and the dividend amounted to EUR 61.5 million (2005: 51.0). Given these very good figures, the Management Board and Supervisory Board will propose a significant increase in the dividend to the annual general meeting on 3 May 2007: by about 40 percent to EUR 0.80 per share (2005: 0.57).

Capital investment and employee numbers up

Spending on property, plant and equipment as well as intangible assets in 2006 was, at EUR 83.7 million (2005: 65.0), well above the depreciation and amortisation charges amounting to EUR 56.6 million. Among other things, the funds went into building and expanding wiring system facilities as well as a new plant to make high temperature cables in the German town of Halver.
Leoni employed 35,129 people worldwide on 31 December (2005: 32,638). This eight percent increase was due largely to acquisitions as well as expanded operations at various facilities in Asia, North Africa and in the Americas. The number of employees in Germany rose by 179 people to 3,877.

Wire & Cable division tops one-billion threshold

The external sales of the Wire & Cable division were up from EUR 668.6 million to EUR 1,154.0 million in 2006 and thus exceeded the one-billion threshold for the first time. Year on year, this corresponds to an increase of nearly 73 percent, while 21 percent of it were generated through organic growth. This is based especially on the rising demand in key markets such as the motor vehicle and capital goods industries. Acquisitions, above all those of the Kerpen and Studer companies, accounted for 42 percent of the sales increase. The sharply increased price of copper accounted for 37 percent of the sales gain. Earnings before interest and taxes were up by 61 percent to EUR 67.6 million in 2006 (2005: 42.0), which is attributable above all to extended activity in profitable market niches and to enhancing value creation. The Wire & Cable division employed 7,767 people on the closing date, which is 1,011 more than one year earlier (6,756). This 15 percent growth is attributable above all to the new subsidiaries as well as additional recruitment in China.

Profitable growth in the Wiring Systems division  

The Wiring Systems division increased its external sales by nearly nine percent to EUR 954.2 million (2005: 879.4). The key factors were the generally good demand and the trend in the automotive industry towards highly equipped premium-segment cars, which require more complex wiring systems. The additional sales and the correspondingly good capacity utilisation resulted, despite the persisting pressure on prices, in improved earnings: earnings before interest and taxes were up from EUR 61.4 million to EUR 61.8 million. This includes expenses amounting to EUR 11.1 million for restructuring at various facilities in Germany and abroad. The division recruited more staff to handle the rising volume of business and to provide the capacity for executing new orders, taking the number of employees up to 27,199 (2005: 25,729). Leoni gained extensive new and follow-on projects from the car and commercial vehicle industry in the year under report, most of which will benefit sales from 2009.

Slight sales increase in 2007

Based on the assumption of an unchanged, favourable economic setting and an average copper price of EUR 5 per kg, the Leoni Group should generate a sales increase in 2007 by a mid single-digit percentage rate. Due to pre-production spending towards further growth in the Wiring Systems division, earnings before interest and taxes will from today’s perspective amount to between EUR 120 and 125 million. In 2008 there is likely to be a sales increase similar to that in 2007 and a significant rise in earnings. Possible acquisitions are disregarded in this forecast.