Electronics Production | August 10, 2010
Leoni: Consolidated sales up 38% after 6 months
Leoni AG is expanding its business at a significantly more vigorous pace than expected: In the 2Q/2010, the consolidated sales rose by more than 41% year on year to EUR 748.1 million.
EBIT (earnings before interest and taxes) improved to EUR 34.6 million (previous year: a loss of EUR 31.0 million), with consolidated earnings after taxes amounting to EUR 16.5 million (from a pre-year loss of EUR 38.5 million). The Company's growth following the economic crisis therefore picked up further pace. Over the whole of the first half of 2010, Leoni succeeded in raising its consolidated sales versus the crisis-affected level of the previous year by 37.5% to EUR 1,406.6 million (H1/2009: EUR 1,022.7 million). Both of the Company's divisions benefited considerably from the economic recovery and outperformed their most important markets. Thanks to the strong sales increase and the sustained benefits from the cost reduction programme, half-year EBIT climbed to EUR 57.6 million (from a loss in the previous year of EUR 77.8 million). Consolidated earnings after taxes improved to EUR 26.7 million in the half-year period under report, up from a loss of EUR 88.2 million in the first six months of 2009. On 30 June 2010, the Leoni Group employed 50'365 people, i.e. 543 more than at the end of 2009. Of this total, there were 3'740 employees in Germany (31 December 2009: 3'795) and 46'625 outside Germany (31 December 2009: 46'027). Wiring Systems: demand rising for all vehicle categories The external sales of the Wiring Systems division increased by nearly 33% year on year in the second quarter of 2010, to EUR 413.8 million (previous year: EUR 311.2 million). Leoni took in substantially more orders for cable harnesses and wiring systems covering all vehicle categories. For the first half the increase in sales adds up one of 34% to EUR 778.9 million (previous year: EUR 581.2 million) and the division’s EBIT improved to EUR 29.5 million (previous year: a loss of EUR 48.7 million). In so doing, Leoni generated high rates of growth in China as well as in business involving electromechanical components. Business with the commercial vehicle manufacturers recently also recovered considerably, worldwide. By gaining additional projects from the multinational motor vehicle industry the Wiring Systems division also succeeded in further broadening its market position. Wire & Cable Solutions: sales up across the sectors Compared with the previous year’s benchmark figure, the Wire & Cable Solutions division generated surprisingly strong sales growth of about 53% to EUR 334.3 million (previous year: EUR 219.1 million). Over the whole of the first half, external sales were up by 42% or so to EUR 627.7 million (previous year: EUR 441.4 million), with the sharp increase in the price of copper accounting for about half of this growth. The division’s EBIT improved to EUR 27.8 million (previous year: a loss of EUR 26.4 million). There was an especially substantial increase in demand for automotive cables, wire products and household appliance cables. The corresponding production capacity is currently being extended at facilities in China, Morocco and Mexico. There was also a very strong uptrend in business with the rolling stock engineering, solar energy and medical technology sectors as well as involving infrastructure projects. Forecast for the year: significantly more sales and earnings Based on performance that far exceeded expectations in both divisions during the first half and the generally favourable prospects for business, Leoni has significantly raised its forecast for the year as a whole: Group-wide, sales are now expected to rise by 20% to 25% to between EUR 2.6 and 2.7 billion (previous year: EUR 2.16 billion). The company previously projected a 10% increase to EUR 2.4 billion. The forecast for consolidated EBIT has doubled to about EUR 100 million (previous year: a loss of EUR 116.3 million).