Nuremberg, 2 May 2007 – Leoni AG increased its consolidated external sales by 23 percent year on year in the first quarter of 2007, from EUR 476.9 million to EUR 586.5 million. Earnings before interest and taxes held steady across the Group in the period under report with a figure of EUR 34.0 million (previous year: 34.2) even though Leoni committed substantial pre-production spending to future growth. Development work was stepped up significantly to prepare for new orders that will exert a positive effect from 2008. Consolidated net income was up five percent to EUR 20.7 million (previous year: 19.7) due to a lower tax rate.

Leoni’s consolidated sales from January to March 2007 rose by EUR 109.6 million compared with the same period in the previous year. The wiring and cable systems specialist generated the largest proportion of this growth – 43 percent – from its own resources. New subsidiaries in the Wire & Cable Solutions division, which did not yet belong to the Group in the first quarter of 2006, accounted for 29 percent while 28 percent was due to the sharp rise in the price of copper, the most important raw material for Leoni. On 31 March 2007, Leoni employed 34,721 people worldwide (33,244 in the previous year). This involved increases in the number of staff to 3,910 (from 3,690) in Germany and to 30,811 (from 29,554) outside Germany.

Preparations for major orders from the motor vehicle industry

The Wiring Systems division, which produces wiring systems and cable harnesses for the motor vehicle industry, benefited in early 2007 from still strong international demand for cars with high-end, electronically governed equipment. Business with the commercial vehicle and component supply industries also expanded. The division’s external sales in the first three months of 2007 thus rose by nine percent to EUR 262.8 million (242.0 a year earlier). Its earnings before interest and taxes (EBIT) contracted from EUR 17.9 million to EUR 16.8 million, on the other hand, due to incurring substantial pre-production expenses in the period under report. This involves extensive new and follow-on projects for the car and commercial vehicle industry worth a total of EUR 3.4 billion, which will take effect from 2008 and will generate additional sales of about EUR 400 million a year in 2010 and 2011. R&D work has been stepped up and various facilities in Asia, Latin America and North Africa are being either set up or expanded in preparation.

Special cables business with industry growing strongly

The Wire & Cable Solutions division maintained its course of expansion with wire and cable products as well as systems. In the first quarter of 2007, the division’s external sales were up 38 percent to EUR 323.7 million (234.9 in the previous year). Organic growth came to 13 percent. Leoni made gains above all with special cables for industry, in particular for the mechanical engineering sector, the robotics business, mobile communications, medical and automation equipment as well as the aviation and space industry. Business involving special cables for petrochemical plants and infrastructure projects likewise expanded strongly. With the aim of tapping further into the growth market for high temperature cables, the Wire & Cable Solutions division is setting up a new facility, namely LEONI HighTemp Solutions, in North-Rhine Westphalia that will commence production in the second quarter of 2007. The division’s EBIT increased slightly quarter on quarter, from EUR 16.3 million to EUR 16.6 million, despite the start-up costs thus incurred.

Forecasts for 2007 reaffirmed

The Company's performance in the first quarter substantiates the forecasts provided for the year as a whole, which, from today's perspective, will surely be matched. Leoni’s consolidated sales are targeted to increase by a mid single-digit percentage rate (from the previous year’s EUR 2.11 billion). Consolidated earnings before interest and taxes should come to between EUR 120 and 125 million (EUR 130.2 million in the previous year). This includes the pre-production spending on future growth in the Wiring Systems division. Possible acquisitions are not yet contained in this forecast. Leoni projects a further sales increase and a considerable rise in earnings for 2008.