Nuremberg – Nuremberg-based LEONI AG has continued to grow despite the persistently poor economic conditions, achieving a small year-on-year sales increase in the first nine months of 2002. The figure was EUR 830.9 million (up from EUR 827.7 million for the first 9 months of 2001). Net consolidated income was up substantially, namely from EUR 16 million to EUR 38.3 million. Leaving aside the extraordinary income resulting from application of US GAAP, this works out to a significant 33% increase. The Wiring Systems division remained the force driving growth. The Cable and Wire divisions, by contrast, were affected by the persis-tently weak state of the economy. LEONI AG will nevertheless be able to meet its target for the year of increasing sales and earnings.
Strong growth in wiring systems
The Wiring Systems division remains our strongest growing business. This is attributable above all to the successful DaimlerChrysler, Audi, VW and Porsche cars for which LEONI supplies product. We also recorded growth in our US and UK businesses. At EUR 444.1 million, our sales were up 7% in the same period of last year (EUR 415.1 million). We managed to generate a 22 per cent increase in earnings before interest, tax, depreciation and amortisation (EBITDA), from EUR 31.7 million to EUR 38.7 million. Yet earnings were below the average for the 1st half because of the high advance expenditure on large-scale projects in Romania and the Ukraine where pilot production has made a successful start.
Cable division achieves higher earnings than in previous quarters
The sales and earnings of the Cable division were affected by the lower price of copper compared with last year and the weak state of the economy persisting for longer than expected. Business in China involving the electrical appliances industry did exceptionally well. We also managed to generate an increase in sales in the automotive wire segment. The poor state of the communications sector, on the other hand, continues to entail losses of sales. There has also been a decline in demand from the European electrical appliances industry. An upturn in the capital goods industry has yet to materialise. Against this economic backdrop, sales fell 2.1% short of last year with a figure of EUR 326.1 million as opposed to EUR 333.1 million. By contrast, EBITDA, at EUR 40.2 million for the first nine months, almost matched the figure of EUR 40.7 million recorded in 2001. These earnings of the third quarter were well up on the average for the preceding quar-ters of 2002. By way of comparison: EBITDA came to EUR 14.1 million in the third quarter, whereas the figure was only EUR 11.5 million for the second quarter.
An ongoing slump in the wire business
Our Wire division did not experience any upturn in the third quarter of 2002 either. Although business in China performed very well, the poor state of the communications market continues to weigh on both sales and earnings. At EUR 60.7 million, nine-month sales were down 24% on the previous year’s figure of EUR 79.5 million. The division nevertheless managed to generate better EBITDA than in the first nine months of 2001. The improvement, from EUR 2.4 million to EUR 2.6 million, was achieved by the measures taken to adjust costs
A growing number of employees thanks to new orders
The total number of our employees has increased compared with both the 1st half and last year. On 30 September 2002, the Group employed 17,712 people worldwide (17,405 in 2001). This growth in the workforce is due mainly to our new wiring systems facilities in Romania and in the Ukraine. In these countries we are currently building up teams that are preparing for the start of series production in 2003/2004 and are already producing their first cable harnesses.
Target for the year attainable despite the poor economic situation
Despite decreases in some sectors, LEONI AG will meet its target of a slight increase in sales for the year. Net consolidated income will be well up on last year even when leaving aside the extraordinary income derived from application of the new US GAAP.
Thanks to its broad range of products, which cover a very wide variety of different sectors, LEONI Group is able to make up for the flat economy overall. The successful cars for which LEONI supplies product form a key basis in this regard. New orders from DaimlerChrysler, General Motors, BMW and Land Rover have provided additional sales potential that will produce a surge in revenues starting in 2004.
