PRESS RELEASE
Leoni’s sales up, but earnings down in the 3rd quarter of 2015
Full-year EBIT at more than EUR 130 million
Nuremberg, 10 November 2015 – Leoni, the leading European provider of
cables and cable systems to the automotive sector and other industries,
increased its consolidated sales by about 10 percent year on year to EUR
1,111.7 million as planned in the third quarter of 2015 (previous year: EUR
1,013.8 million). However, Group-wide earnings before interest and taxes
(EBIT) declined by about 14 percent to EUR 29.8 million (previous year:
EUR 34.7 million) because of surprisingly heavy charges in the Wiring
Systems Division. Business volume was up by roughly 11 percent to EUR
3,376.2 million over the whole nine-month period (previous year: EUR
3,053.4 million) and EBIT was down by approximately 13 percent to EUR
115.3 million (previous year: EUR 132.7 million). For fiscal 2015 as a
whole, we project sales of at least EUR 4.4 billion and EBIT of more than
EUR 130 million.
Of the sales increase in the first three quarters (EUR 322.8 million), EUR 155.8
million stemmed from organic growth. Changes in exchange rates exerted a
positive effect of EUR 199.1 million and the low price of copper had an adverse
effect of EUR 32.1 million. In the EMEA (Europe, Middle East and Africa)
region, sales was up by about 7 percent to EUR 2,191.6 million (previous year:
EUR 2,045.9 million); in the Americas it rose by nearly 25 percent to EUR
567.4 million (previous year: EUR 455.4 million) and in Asia it increased by
almost 12 percent to EUR 617.2 million (previous year: EUR 552.1 million).
Wiring Systems Division: earnings slump in the third quarter
External sales in the Wiring Systems Division (WSD) were up by nearly 13
percent to EUR 649.6 million in the period from July to September 2015
(previous year: EUR 576.5 million). On the other hand, there was a quarter-onquarter decrease in EBIT to EUR 5.8 million (previous year: EUR 11.7 million)
due to surprisingly heavy charges, most of which arose in September. The
principal reasons for this were accelerated and more complex than expected
ramp-ups of new projects because customers increased the amount of product
page 1 of 4
PRESS RELEASE
they called forward at short notice and ordered more extensive cable
harnesses than planned. These essentially positive developments for Leoni
resulted in unbudgeted additional costs and inefficient processes in the Wiring
Systems Division. These shortcomings entail longer-persisting adverse effects.
Major staffing bottlenecks occurred at one facility in Romania that was
particularly affected. As the region has full employment, the division had to
cover its staffing needs from other countries and with agency manpower. The
unexpectedly steep increase in the minimum wage in Romania was a further
burden.
Additional factors weighing on earnings involved the early end of some
profitable projects, for instance in the agricultural sector and with respect to
some car models. Overall in the first three quarters of 2015, the Wiring
Systems Division’s external sales increased by about 12 percent to EUR
1,987.3 million (previous year: EUR 1,771.9 million), while its EBIT was down
by approximately 16 percent to EUR 58.7 million (previous year: EUR 69.8
million).
Wire & Cable Solutions: sales and earnings both up in the third quarter
The Wire & Cable Solutions Division (WCS) increased its external sales by
about 6 percent year on year to EUR 462.1 million in the period from July to
September 2015 (previous year: EUR 437.3 million) and by just over 8 percent
year on year to EUR 1,388.9 million for the nine-month period (previous year:
EUR 1,281.5 million). This involved growth in demand for automotive cables as
well as for robotics and high-speed cables, while the business comprising data
cables as well as cables for infrastructure projects and the petrochemical
industry was weaker than projected. Earnings before interest and taxes rose by
just over 4 percent to EUR 24.1 million in the third quarter of 2015 (previous
year: EUR 23.1 million). The EBIT of EUR 56.5 million for the first nine months
was still about 10 percent below the same figure for the previous year (EUR
62.9 million) because various factors had an adverse impact in the first half –
these included an unfavourable product mix in the automotive cables business,
which grew relatively strongly, and advance spending on the WCS ON
page 2 of 4
PRESS RELEASE
Excellence performance programme, which already generated beneficial effect
in the third quarter.
Nearly 75,000 employees
The number of employees in the Leoni Group on 30 September 2015 was up
by 7,582 people on the same date in the previous year to 74,973 staff (30
September 2014: 67,391). The recruitment during the current financial year
took place mainly at wiring systems facilities in Eastern Europe and North
Africa as well as at automotive cable plants in Asia and the Americas, but also
in Germany.
Forecast for 2015
For the whole of 2015 Leoni will increase its consolidated sales as recently
forecast to at least EUR 4.4 billion (previous year: EUR 4.1 billion), with this
growth having been generated by both divisions. Earnings before interest and
taxes, on the other hand, will only amount to more than EUR 130 million
(previous year: EUR 182.5 million) and will therefore, as announced on 12
October, fall substantially short of the originally targeted figure of more than
EUR 200 million. The factors responsible are mainly the described, unexpected
charges in the Wiring Systems Division as well as, to a lesser extent, business
that was short of estimates in some industrial segments.
Dieter Bellé, President & CEO of Leoni AG, said: “As a well positioned and
financed company, which continues to have good prospects, Leoni will
thoroughly and lastingly eliminate the current margin problem and return to a
course of profit-oriented growth.” Therefore, a task force headed by Dieter
Bellé and Dr. Frank Hiller, Management Board member with responsibility for
the WCS division, was set up, which is analysing the precise causes and will
develop the corresponding countermeasures with top priority.
As reported, earnings next year will probably also be reduced by dips in
demand and the consequently missing profit contributions as well as due to the
worsened economic conditions in China and Russia as well as among the US
commercial vehicle industry and some carmakers. Considering the necessary
reviews, especially also of the project start-ups scheduled for 2016, Leoni will
page 3 of 4
PRESS RELEASE
present a robust forecast for fiscal 2016 earnings by the time of its balance
sheet press conference on 23 March.
(6,597 characters incl. blanks)
Leoni performance overview
Group key figures
Sales [€ million]
2015
1,111.7
3rd quarter
1st - 3rd quarter
2014 Change
2015
2014
Change
1,013.8
9.7%
3,376.2 3,053.4 10.6%
EBITDA [€ million]
67.1
67.1
0.0%
220.5
225.6
(2.3)%
EBIT [€ million]
29.8
34.7
(14.1)%
115.3
132.7
(13.1)%
Adjusted EBIT * [€ million]
32.2
36.4
(11.5)%
124.7
140.2
(11.1)%
EBT [€ million]
23.8
26.0
(8.5)%
95.4
109.3
(12.7)%
Consolidated net income [€ million]
15.7
16.1
(2.5)%
67.5
77.5
(12.9)%
Capex incl. acquisitions [€ million]
63.5
51.0
24.5%
162.2
140.2
15.7%
34.5%
33.9 %
-
34.5%
33.9 %
-
0.48
0.49
(2.0)%
2.06
2.37
(13.1)%
74,973
67,391
11.3%
74,973
67,391
11.3%
Equity ratio [%]
Earnings per share [€]
Employees [as at 30 September]
* Earnings adjusted for the impact of revaluation as part of allocating the prices of major acquisitions,
restructuring, impairment of non-current assets, gains on business disposals and on business combinations
including related derivatives.
 The complete quarterly report can be found at
www.leoni.com/en/financial-publications/
About the Leoni Group
Leoni is a global supplier of wires, optical fibers, cables and cable systems as well as
related services for the automotive sector and further industries. Leoni develops and
produces technically sophisticated products from single-core automotive cables
through to complete wiring systems. Leoni’s product range also comprises wires and
strands, standardised cables, special cables and cable system assemblies for various
industrial markets. The group of companies, which is listed on the German MDAX,
employs about 75,000 people in 31 countries and generated consolidated sales of
EUR 4.1 billion in 2014.
Contact person for journalists
Sven Schmidt
Corporate Public & Media Relations
LEONI AG
Phone +49 (0)911-2023-467
Fax
+49 (0)911-2023-231
E-mail presse@leoni.com
page 4 of 4