Automotive supplier considers divesting cable division / Plans for IPO or direct sale
Automotive supplier Leoni (Nuremberg / Germany; www.leoni.com) is still sailing troubled waters after it has overturned its forecast for 2019 and announced massive job cuts – see Plasteurope.com of 26.03.2019. Now the cable and wiring systems manufacturer has announced plans to either sell its Wire and Cable Solutions (WCS) division directly or to float it on the stock exchange as an individual company. Leoni would then only consist of the Wiring Systems Division (WSD). While preparations are under way, a final decision has not yet been made.

The group management board is of the opinion that the two divisions have too little overlap. While WCS concentrates on cable solutions, WSD focuses on energy and data solutions, and both are offering corresponding services. One could say that one division is focused on hardware while the other is specialised on software and power transmission. Chairman of the board Aldo Kamper said, “We are of the opinion that both divisions would benefit from a separation. It would create two clearly focused businesses that can implement individual market and technology developments and investments, better and faster.”

In the area of wiring systems, the automotive supplier intends to expand its range of services. The company sees opportunities in engineering, design and simulation. The management board is confident that the company would also be able to benefit more from the rise of e-mobility by concentrating on its wiring systems business.
Cost-cutting programme continues
Meanwhile, the company’s cost-cutting programme “Value 21”, expected to save an annual amount of EUR 500m by 2022, is running according to plan. Leoni says WSD accounts for 75% of savings.

In fiscal 2018, the group generated sales of EUR 5.1 bn, a 4% increase against the previous year. However, earnings before interest and taxes (EBIT) decreased by 37% to EUR 144m. WSD generated sales of EUR 3.2 bn (up 3%) and EBIT of EUR 80m (down 32%). WCS could hold sales stable at EUR 1.9 bn, which is comparable to the previous year. But here too, EBIT fell significantly, by 37% to EUR 66m.
17.07.2019 Plasteurope.com [242926-0]
Published on 17.07.2019
Leoni: Automobilzulieferer will Kabelsparte loswerdenGerman version of this article...

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