Leoni, the leading European provider of cables and cable systems to the automotive sector and other industries, in the first quarter of 2015 increased its consolidated sales by about nine per cent year on year to the new quarterly high of EUR 1,108.8 million (previous year: EUR 1,020.2 million).
The company generated nearly half of this growth from its own resources. Foreign exchange effects also gave sales a considerable boost, although this was in part offset by the negative impact from the decrease in the price of copper. In regional terms, Leoni made gains, especially in the Americas and Asia, and also reported a slight increase in the Europe, Middle East and Africa (EMEA) region.
Sales in the Wiring Systems Division rose to EUR 653.9 million in the period under report (previous year: EUR 597.7 million). There was a particularly strong increase in shipments of wiring systems and cable harnesses to the export-heavyweight German premium carmakers. Sales to American motor vehicle manufacturers and the international commercial vehicle industry were also up significantly. The amount of business with customers based in other European countries was down, on the other hand, because of the persisting subdued performance of the French car industry.
The Wiring Systems Division started making numerous new products in the first quarter and prepared for further customer projects, which will go into production in the months ahead. In total, there will be a record number of 27 major new WSD project start-ups in 2015. They will form the basis for the next big growth surge in the year ahead, but during the period under report initially incurred heavy pre-production and start-up costs, which will, however, come down significantly as the year progresses. The division’s EBIT therefore dipped to EUR 17.9 million (previous year: EUR 31.8 million).
The Wire & Cable Solutions Division (WCS) of Leoni increased its sales to EUR 454.9 million in the first three months of 2015 (previous year: EUR 422.6 million). This involved persisting, strong demand for automotive cables as well as cables for the robotics and capital goods industries, especially in Asia and the Americas. By contrast, business involving infrastructure projects was below expectations because of project delays. Furthermore, while demand from the oil and gas industry recovered appreciably, the corresponding projects will not benefit from sales and earnings until a few months ahead.
It also expects this to be followed in 2016 by a strong growth surge to sales of EUR 5 billion. The resulting, additional contribution to profit will, together with further efficiency gains as well as significantly reduced pre-production costs, make a 7 per cent EBIT margin possible.
