The poor figures delivered by automotive parts supplier Leoni (Nuremberg / Germany; www.leoni.com) in Q1 2019 have evidently worried the creditors to such an extent that, despite the strategic cost-cutting programme “Value21” drawn up in Q4 2018, restructuring expert Hans-Joachim Ziems has been commissioned to examine the situation. The situation does not seem much better in Q2 – EBIT was in the minus by EUR 30m. Second-quarter revenue in fell to EUR 1.25 bn (down from EUR 1.33 bn in Q2 2018).

A company spokesperson told Plasteurope.com that “constructive discussions with the creditors” have been ongoing for several weeks, but the content of the talks remains a secret. Whether Ziems is involved was neither denied nor confirmed. The company merely stated that, with the support of the creditors, Leoni was on the right road to tapping the full potential of its strategic programme.

According to Reuters, Ziems is to examine whether the project submitted by CEO Aldo Kamper is feasible. Until this process has been concluded, the creditors will say nothing, but there will also be no more money for the time being.

Kamper had announced that he wanted to split up the group and to either sell its Wire & Cable Solutions (WCS) division or float it on the stock market as an individual company – see Plasteurope.com of 17.07.2019. This division, which is focused on the development and production of wires, braids and optical fibres as well as standard and speciality cables for industrial applications, accounts for around 40% of the company’s most recent turnover of EUR 5.1 bn. Leoni wants to concentrate completely on its Wiring Systems Division (WSD), which manufactures cable sets and onboard wiring systems for the automotive and utility vehicle segment.

In the last four quarters since Q2 2018, the company has reported constantly declining sales: from an increase of 8.8% to a decline of 5.1% in the last quarter. EBIT in Q1 was also deeply in the red in the middle of the automotive crisis, by minus EUR 125m. A major negative influence was the start-up of the new plant in Merida / Mexico and other one-off effects from write-offs and provisions amounting to EUR 102m – mainly from WSD.

WCS has started its move to a new plant in Roth / Germany, which was built in 2017. The first machines are already in the testing phase. Production is due to start in autumn this year and all the 800 or so employees from Nuremberg should be moved to the new location by mid-2020.