EuroWire January 2016

News Corporate

Leoni revises forecasts for 2015 and 2016

raising profitability, the aforementioned adverse factors in the wiring systems division will again weigh on earnings in the upcoming fiscal year. This will be aggravated by losses of sales that are now expected and consequently the missing earnings contributions. The company’s business prospects are being affected by the worsened economic conditions in China and Russia, which will probably lead to reduced demand, while USA business with the commercial vehicle industry as well as the amount of sales to some customers will likely not be at the previously budgeted level. Leoni has therefore lowered its sales forecast for 2016 from €4.8 billion before to about €4.6 billion now. The company will be significantly short of the previously set target of a 7 per cent EBIT margin. Board resignation Dr Andreas Brand has resigned from his position as a member of Leoni’s management board with responsibility for the wiring systems division with immediate effect. Management board members Mr Dieter Bellé and Dr Frank Hiller will temporarily assume his duties until a successor is appointed.

Nuremberg, Germany-based Leoni AG determines a downtrend in earnings in the third quarter following a very solid second quarter. The Q3 earnings before interest and taxes (EBIT) of approximately €30m turned out significantly weaker than anticipated. This was due to surprisingly heavy charges in the wiring systems division, particularly in September when accelerated start-ups of complex projects combined with an unexpected rise in unit output figures resulted in increased costs and reduced efficiency. In addition, there were premature ends to profitable projects. Furthermore, the structural measures applied in the context of ongoing globalisation are not yet exerting the intended effect. By contrast, the wire and cable solutions division’s third quarter sales and earnings performance was, on the whole, in line with expectations.

The weaker performance in the wiring systems division can be expected to continue to weigh on earnings in the fourth quarter.

Leoni consequently now projects that the earnings before interest and taxes (EBIT) of €200m forecast for fiscal 2015 will not be achieved. Consolidated sales are still expected to be at a level of at least €4.3 billion.

Leoni AG – Germany Website : www.leoni.com

Leoni does not retain its targets set for the 2016 financial year. Although the company will continue to give top priority to

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January 2016