Leoni continued to expand

Earnings before interest, taxes and depreciation/amortisation (EBITDA) rose by 16 percent to EUR 61.2 million (2007: 52.7) despite extensive pre-production spending on new projects. Due to the expected adverse effect on earnings of revaluation according to the purchase price allocation of LWS France, earnings before interest and taxes after three months of 2008 were, at EUR 34.1 million, down slightly on the previous year’s figure of EUR 35.3 million. With a figure of EUR 20.0 million, consolidated net income likewise came close the level in the first quarter of 2007 (EUR 20.7 million). To facilitate further growth in the future, Leoni increased its spending on property, plant and equipment as well as intangible assets significantly in the period under report, to EUR 31.5 million (from EUR 15.4 million in the previous year). This included expansion of capacity for production of wiring systems in China, North Africa and Eastern Europe as well as setting a new facility in Bautzen, Germany for refining polymer cables by means of irradiation crosslinking. On the 31 March 2008 reporting date, the Leoni Group had 52,179 employees (34,721 in the previous year). This strong increase was the result mainly of having integrated LWS France with 14,714 employees. In Germany the workforce grew by 6 percent to 4,130 people and outside Germany by 56 percent to 48,049. Earnings-oriented growth at Wire & Cable Solutions In its Wire & Cable Solutions division, Leoni increased sales by 11 percent, from EUR 323.7 million in the first quarter of 2007 to EUR 359.5 million; growth generated in roughly equal halves from own resources and by way of acquisitions. Thanks to its good position in profitable niche markets and its high capacity utilisation, the division’s earnings before interest and taxes (EBIT) climbed by 21 percent in the first three months of 2008, to EUR 21.9 million from EUR 18.2 million in the previous year. Business involving special cables for the automotive industry as well as infrastructure projects, petrochemical plant and automation performed especially strongly. Integration of Leoni Wiring Systems France successfully started The Wiring Systems division benefited in the period under report from initial consolidation of LWS France, which has been part of the Group since 2 January 2008, and thereby expanded the volume of its business substantially to EUR 411.1 million (2007: 262.8). Integration of this new subsidiary, which outperformed expectations in the first quarter of 2008 and generated sales of EUR 159.2 million, was the focal point of activity. In addition, the division stepped up development work and preparations for series production start-up of new projects, which will boost sales in the years ahead. This pre-production spending as well as the adverse effect on earnings of revaluation related to allocation of the price to purchase LWS France resulted in the expected decline of the division’s operating earnings (EBIT) to EUR 13.4 million (2007: 16.7). Excluding the adverse effect on earnings from revaluation pertaining to LWS France EBIT came to € 18.4 million.