Electronics Production | August 02, 2007
Leoni's sales increased by 15%
German based company Leoni AG expanded further in the second quarter of 2007. Consolidated sales from the beginning of April to the end of June of this year rose by 15 percent versus the corresponding period in 2006, to EUR 590.5 million (2006: 512.0).
Groupwide, earnings before interest and taxes (EBIT) in the same period were up by ten percent to EUR 35.2 million (2006: 31.9). Based on this performance exceeding expectations, Leoni has raised its forecasts for the year as a whole: The Group now expects to increase consolidated sales to approximately EUR 2.3 billion in 2007 (from 2.1 in 2006). Consolidated EBIT should, despite extensive preproduction expenses, once again be able to achieve the previous year's record level with a figure of about EUR 130 million (2006: 130.2). Consolidated net income will probably climb to a new high of around EUR 83 million (79.3 in 2006). Compared with the same period in 2006, Leoni's consolidated sales in the first half of 2007 increased by 19 percent or EUR 188.1 million to about EUR 1.2 billion (EUR 988.9 million in 2006). Of that increase, 38 percent were due to organic growth, 38 percent to companies that did not yet belong to the Leoni Group in the first half of 2006 and 24 percent to the increased price of copper. In spite of substantial pre-production spending on future projects, earnings before interest and taxes from the beginning of January to the end of June 2007 grew by five percent to EUR 69.2 million (2006: 66.1). Consolidated net income, favoured by a non-recurring tax benefit, increased by 16 percent to EUR 44.6 million in the first half of 2007 (2006: 38.5). On 30 June 2007, LEONI employed 34,156 people worldwide, i.e. 982 more than one year earlier (33,174 in 2006). In Germany, the workforce increased by five percent to 3,912 employees (2006: 3,731), while outside Germany there was a rise of three percent to 30,244 people (2006: 29,443). Strong demand for complex wiring systems With a figure of EUR 243.9 million, the Wiring Systems division generated external sales in the second quarter of 2007 roughly at the level for the corresponding period in the previous year of EUR 243.6 million. Although some of the existing major projects with the automotive industry have already exceeded their peak output figures, this was offset by the growing trend towards higher-end equipment and thus also to more complex wiring systems. The division's sales in the first half of 2007 were, compared with the same figure in 2006, up four percent to EUR 506.7 million (2006: 485.6 million). As expected, the division's EBIT declined in the same period and amounted to EUR 30.6 million (2006: 35.1). This reflected the substantial preproduction expenses, serving to prepare for extensive new orders from the car and commercial vehicle industry. In addition to costly development work, this involved expanding capacity at various facilities in Asia, Eastern Europe and North Africa. The new orders will in part benefit sales from 2008. Sales for the second quarter of 2007 in the Wire & Cable Solutions division climbed 29 percent to EUR 346.6 million (2006: 268.4). Leoni grew strongly above all in China, among others in the automotive, mobile communication and power cord segments. The petrochemical project business also expanded robustly. For the first half of 2007, the division reported a 33 percent increase in sales to EUR 670.3 million (2006: 503.3), with earnings before interest and taxes showing a rise of 30 percent to EUR 40.2 million (2006: 31.0). The new subsidiaries Leoni Kerpen, which has belonged to the Group since the end of 2005, and Leoni Studer proved to be especially profitable. Leoni Studer was taken over at the end of July 2006 and therefore did not yet contribute to earnings in the first half of 2006. The recent acquisition of Italy-based Silitherm will strengthen the division with its know-how in the field of silicone cables. The Spanish cable manufacturer Furas will complete Leoni's product range for the electrical appliance industry.
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