Leoni stays on record course

Both divisions grew more strongly than expected, underpinned by the heavy demand from the automotive and capital goods industries as well as the Company's successful strategy of internationalisation. Leoni’s consolidated sales for the period from April to June 2011 thus rose by 26% year on year to EUR 943.7 million (previous year: EUR 748.1 million) and by 32% to EUR 1,854.3 million (previous year: EUR 1,406.6 million) over the whole of the first half of 2011. Beneficial economies of scale and leaner cost structures drove a disproportionately strong improvement in consolidated EBIT (earnings before interest and taxes) compared with the previous year: on a quarterly basis EBIT was up by 95% to EUR 67.6 million (previous year: EUR 34.6 million) and in a six-month comparison by 124% to EUR 129.0 million (previous year: EUR 57.6 million). Leoni thus generated new quarterly and six-month all-time highs in both sales and earnings. Consolidated net income tripled to EUR 82.2 million (previous year: EUR 26.7 million) in the first six months of 2011. Strong demand from the automotive and capital goods industries Business involving wiring systems and cable harnesses for the multinational carmakers remained highly dynamic: the Wiring Systems Division increased its external sales by 24% year on year in the period from April to June 2011, to EUR 513.3 million (previous year: EUR 413.8 million), and in the first six months by 30% year on year to EUR 1,013.5 million (previous year: EUR 778.9 million). The division generated strong growth above all in China and Russia as well as among international commercial vehicle companies. Divisional EBIT doubled in the second quarter of 2011 to EUR 40.1 million (previous year: EUR 20.0 million), adding up to 155% growth to EUR 75.2 million over the first half (previous year: EUR 29.5 million). Automotive and special cables, particularly in China and in the NAFTA area, were the growth drivers in the Wire & Cable Solutions Division. There was also very good demand for cables and cable systems for petrochemical plant as well as for automation and medical technology. The division’s external sales in the second quarter of 2011 increased by 29% year on year to EUR 430.3 million (previous year: EUR 334.3 million) while divisional EBIT rose by 93% to EUR 27.8 million (previous year: EUR 14.4 million). In the first six months sales rose by 34% to EUR 840.8 million (previous year: EUR 627.7 million) and EBIT improved by 93% to EUR 53.7 million (previous year: EUR 27.8 million). Capacity expansion stepped up Leoni raised the pace of its capital investment in the second quarter because of the booming demand in numerous areas. The Company expanded production capacity around the globe, the focal areas being expansion of wiring systems facilities in Eastern Europe, North Africa and in the NAFTA area as well as of plant for producing automotive cables in China, Europe, Morocco and Mexico. In total, the Leoni Group invested about EUR 54.8 million in the first half of 2011, equating to a 52 percent increase versus the same period in 2010. More than 56,000 employees worldwide On 30 June 2011, LEONI employed 56,107 people, i.e. 5,742 more than one year earlier. The workforce increased by an overall number of 951 since the beginning of the year – with growth of 169 to 3,944 employees in Germany and of 782 to 52,163 staff outside Germany. There was new recruitment especially at facilities for producing wiring systems and automotive cables. Forecast raised again The surprisingly strong performance in the second quarter and the continued good order situation in both of its divisions prompted Leoni to lift its forecast once again in July. For 2011 as a whole, the Company projects a sales increase to about EUR 3.6 billion (previous year: EUR 2.96 billion), 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). Leoni will increase its capital investment more strongly than hitherto anticipated, probably to about EUR 160 million (previous year: EUR 107.4 million). Net debt should, thanks to the capital increase successfully executed at the beginning of July and the unchanged target for positive free cash flow of about EUR 80 million (previous year: EUR 50.7 million), dip below EUR 300 million by yearend (previous year: EUR 444.6 million).