Electronics Production | November 11, 2010
Leoni raises full-year forecast again
Leoni again outperformed expectations in the third quarter of 2010. The consolidated sales increased by 36% from July to September 2010 versus the same period in 2009, to EUR 719.8 million (previous year: EUR 531.1 million).
Earnings before interest and taxes (EBIT) rose to EUR 39.0 million (previous year: EUR 5.5 million). Against this backdrop, the Company is confident that it will exceed its full-year forecast as raised in July: Leoni’s estimates for fiscal 2010 now are sales of about EUR 2.8 billion (previous year: EUR 2.2 billion) and EBIT of about EUR 120 million (previous year: a loss of EUR 116.3 million). The previous projections were sales of EUR 2.6 to 2.7 billion and EBIT of about EUR 100 million. Underpinning this optimism is the still very upbeat mood in Leoni’s most important markets, manifested in raised sector forecasts and discussions with customers for instance at the IAA Commercial Vehicles trade show. The strong performance in September, when both of the Company's divisions generated their highest monthly sales so far this year, is also an indication of a sustained uptrend. Added up over the first nine months of 2010 there was a 37 percent increase in consolidated sales to EUR 2,126.4 million (previous year: EUR 1,553.8 million), with just under one quarter of this growth, namely EUR 132.4 million, accounted for by the significantly increased price of copper. Thanks to substantially leaner cost structures, EBIT for the first three quarters improved to EUR 96.6 million (previous year: a loss of EUR 72.3 million) while consolidated net income rose to EUR 47.7 million (from a net loss of EUR 92.1 million in the previous year). At the end of September 2010 Leoni employed 52,879 people across the Group, which is 3,057 more than at the end of 2009. Outside Germany the workforce increased by 3,021 employees to 49,048; in Germany the number of staff was up by 36 to 3,831 people. Wiring Systems: more activity in India, Russia and China The Wiring Systems Division increased its sales by 33 percent year on year in the first nine months of 2010, to EUR 1,163.3 million (previous year: EUR 876.2 million), and EBIT improved to a profit of EUR 48.4 million (from a loss of EUR 48.7 million in the previous year). Not only the demand for cable harnesses and wiring systems from the automotive industry proved to be encouragingly strong, but business with the multinational commercial vehicle manufacturers has meanwhile also perceptibly revived. Leoni also sees major opportunity in business involving electromechanical components, in the electromobility sector and in the BRIC countries. The Company is planning, for instance, to commence series production for an electric vehicle and to significantly expand its capacity to produce wiring systems in Russia and China in the fourth quarter of 2010. In India, where the Company has hitherto been active with a development and customer service office, production will probably also start before the end of this year. Wire & Cable Solutions: worldwide capacity expansion In the Wire & Cable Solutions Division, external sales in the first three quarters of 2010 rose by 42 percent versus the same period in 2009, to EUR 963.1 million (previous year: EUR 677.6 million), while EBIT came to a profit of EUR 47.7 million (previous year: a loss of EUR 20.1 million). In so doing, all of the division’s business units and regions made gains and outperformed their respective markets. Given the sustained, strong demand, capacity to produce cables and cable systems will be stepped up worldwide. Already completed, for example, is the expansion of our Mexican facility’s capacity to produce automotive cables; likewise the enlargement of capacity for railway and solar cables as well as for irradiation crosslinking in Switzerland. Among other things, Leoni will start before the end of this year to expand its plant to produce solar flat wires and special passenger car cables in Germany as well as capacity in China to make internal wiring for household appliances.
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