Nuremberg – LEONI AG in Nuremberg has continued to grow in the first half of 2002 in spite of economic conditions, which continue to be difficult. The group managed to increase its turnover slightly up to 561.6 mill. Euro compared with the previous year when it was 558.2 mill Euro. The group profit has likewise gone up. It was 30.8 mill. Euro (2001: 11.6 mill. Euro). Without taking into consideration the special effects incurred as a result of preparing the balance sheet in accordance with US GAAP, this still gives rise to an increase of 18%. The growth was chiefly driven by the Wiring Systems division, which achieved significant increases in turnover and earnings. The Cable division was steady at the same level as the previous year, whereas the Wire division had to put up with more drops in turnover as a result of the persistent weakness of the economy.

Wiring Systems with popular cars still on track for growth
As a result of the continued high demand for the car models supplied with wiring systems by LEONI, in particular those models manufactured by DaimlerChrysler, Audi, VW and Land Rover as well as an increase once more in the business done with the USA and England, the Wiring Systems division managed to increase its turnover by 6.6% up to 298.8 mill. Euro (2001: 280 mill. Euro). It managed to increase its earnings before interest, tax, and depreciation (EBITDA) by about 22% as a result of an increase in turnover as well as the progress made in the restructuring measures in England, and to be more precise, its EBITDA went up from 23.4 mill. Euro up to 28.5 mill Euro.

The Cable division achieves the record level of the previous year once more
The turnover within the Cable division was 221.7 mill. Euro, that is, at the same level as in the previous year (221.9 mill. Euro). The earnings before tax, interest and depreciation remained steady compared with 2001 at 26.1 mill Euro. This means that the record level of the previous year was achieved. Turnover for 2002 failed to live up to expectations somewhat, chiefly as a result of the drop in the price of copper. Whereas the business with car wiring continued to grow, the upturn in the information and telecommunication sector is taking its time. On the other hand there is an upturn in the level of orders taken from the electrical appliances industry. In addition to this, the demand for special cables for capital goods has increased again in the 2nd quarter so that here too an increase is becoming visible compared with the previous year.

Green shoots of recovery are emerging here and there in the Wire division
In contrast to the other divisions, the Wire division has been badly affected by the downturn in the economy. Its turnover dropped by 26.6% down to 41.1 mill. Euro (2001: 56.0 mill. Euro). As a result the earnings before tax, interest and depreciation at 1.3 mill. Euro were a long way below the corresponding figure for the previous year (4.2 mill. Euro). In contrast to cabling and stranded wire for information technology and telecommunication, there is light at the end of the tunnel for the Highly Flexible Stranded Wire division and strips for sub assemblies as well as Lyonese Wares. In the Lyonese Wares division capacity is already full up until the end of the year. As a result of in-depth measures to cut costs including a reduction in staffing levels, the division has managed to prevent its earnings before tax, interest and depreciation from falling more than they have since the 1st quarter.

Progress in productivity makes it possible to reduce the number of staff
The number of staff within the LEONI group has been reduced from the 1st April 2002. Whereas it was still 18,331 at 31.03.2002, it was only 17,423 at 30.06.2002. This is attributable on the one hand to the reduction in staff in the Wire division, which was necessary as a result of the downturn in the economy. The bulk of the drop was however caused by successful rationalisation measures and progress in productivity at a series of Cable and Wiring Systems production facilities. However, the number of staff within the Wiring Systems division will increase significantly within the next two years, since up to 6,000 new jobs are to be created at the new production facilities in Romania and in the Ukraine.

3 percent increase in turnover expected for 2002
In spite of the poor state of the economy and the difficult situation in the Wire business, LEONI AG is abiding by the forecast of a 3 percent increase in turnover it announced for 2002 at its general meeting. The group profits for the year are to exceed the record level of the previous year. A figure similar to that earned in 2001 is expected for earnings before interest and tax.