Leoni underpins annual guidance after strong third quarter
Highest monthly sales in September – significantly strengthened financial base
Thanks to the additional sales and the resulting beneficial economies of scale, Leoni increased its consolidated earnings before interest and taxes (EBIT) by 40 percent to EUR 54.6 million in the period from July to September 2011 (previous year: EUR 39.0 million). Over the first nine months of 2011, EBIT increased by 90 percent to EUR 183.6 million (previous year: EUR 96.6 million) and after-tax profit more than doubled to EUR 115.1 million (previous year: EUR 47.7 million).
Wiring systems, automotive and industrial cables in worldwide demand
Both business divisions underpinned this encouraging performance. In the Wiring Systems Division, external sales in the period from January to September 2011 were up 28 percent on the same period in 2010 to EUR 1,488.0 million (previous year: EUR 1,163.3 million). The third quarter provided EUR 474.5 million of this total (previous year: EUR 384.4 million). Leoni increased its shipments of cable harnesses and wiring systems to international car and commercial vehicle manufacturers worldwide, the focal areas being the United States and the BRIC countries. The division’s EBIT for the quarter rose by 86 percent year on year to EUR 35.1 million (previous year: EUR 18.9 million) and in the nine-month period more than doubled to EUR 110.4 million (previous year: EUR 48.4 million).
The Wire & Cable Solutions Division boosted its external sales by 33 percent to EUR 1,279.3 million in the first nine months of 2011 (previous year: EUR 963.1 million). The third quarter accounted for EUR 438.6 million of this total (previous year: EUR 335.4 million). There was strong, worldwide growth in the automotive cables business as well as with cables for automation technology and infrastructure projects in Europe. The division’s EBIT for the quarter of EUR 19.3 million was down slightly from the previous year’s EUR 19.9 million because of exceptional charges relating to the drop in the price of copper; yet from January to September the figure was up by a strong 53 percent to EUR 73.1 million (previous year: EUR 47.7 million).
More than 59,000 employees at the end of September
Leoni stepped up its capacity expansion in response to the persistently heavy demand on virtually all markets. Worldwide, this expansion involved particularly facilities for manufacturing wiring systems and automotive cables, due to which capital expenditure in the first nine months of 2011 was up by 48 percent year on year to EUR 92.4 million (previous year: EUR 62.4 million). In line with this the Company recruited new staff – above all in Asia, North Africa and Eastern Europe, but also in Germany where the number of employees at the end of September exceeded the 4,000 mark again for the first time since the crisis year of 2009. Group-wide, the workforce grew by 3,883 people to 59,039 in the first three quarters of 2011 (31 December 2010: 55,156). Of this total, 4,007 employees worked in Germany (up 232) and 55,032 outside Germany (up 3,651).
Strengthened financial base
The good operating performance and the 10 percent increase in capital carried out in early July, which provided net proceeds of EUR 111.5 million, substantially improved the Company's financial base. Furthermore, Leoni generated positive free cash flow of EUR 36.6 million in the third quarter (previous year: EUR 5.2 million). The Group was able to reduce its net debt to EUR 354.6 million as at the end of September 2011 (31 December 2010: EUR 444.6 million), and the equity ratio improved from 23.8 percent at the turn of the year to 29.7 percent on 30 September 2011.
Forecast for 2011 reaffirmed
Based on the persistently strong demand and the good order situation in both of its divisions, Leoni reaffirmed its forecast for the year as a whole as raised in July: from today’s perspective, consolidated sales will increase to about EUR 3.6 billion (previous year: EUR 2.96 million), with the Wiring Systems Division expected to provide about EUR 1.9 billion (previous year: EUR 1.63 billion) and the Wire & Cable Solutions Division contributing about EUR 1.7 billion (previous year: EUR 1.32 billion). Consolidated EBIT should increase at a disproportionately strong pace, i.e. to approximately EUR 230 million (previous year: EUR 130.7 million). Net debt should drop below EUR 300 million by yearend (previous year: EUR 444.6 million).
Although there are no signs whatsoever of a downturn in the markets of importance to Leoni, the Company is watching the current financial and debt crisis very closely. The Company regards itself as being well prepared for potentially adverse cyclical changes thanks to its strong earnings performance, the successfully implemented capital increase and its structures that were made substantially more flexible after the last crisis.
Leoni performance overview
Group key figures
Consolidated sales [€ mil.]
Earnings before interest, taxes and depreciation/amortisation (EBITDA) [€ mil.]
EBIT [€ mil.]
Adjusted EBIT * [€ mil.]
Earnings before taxes (EBT) [€ mil.]
› 100 %
Consolidated net income [€ mil.]
› 100 %
Capital expenditure (incl. acquisitions) [€ mil.]
Equity ratio [%]
Earnings per share ** [€]
› 100 %
Employees (as at 30 September)