Leoni expects financial year 2021 EBIT before exceptional items as well as before VALUE 21 costs and free cash flow significantly above its guidance and publishes guidance for 2022
 

Nuremberg, 17 February 2022 - Leoni AG (ISIN: DE0005408884) has, based on provisional, unaudited figures for fiscal 2021, generated sales of about € 5.1 billion (2020: € 4,134 million), EBIT before exceptional items as well as before VALUE 21 costs of about € 170 million (2020: € -59 million) and free cash flow of approximately € -10 million (2020: € -69 million). Sales were thus in line with guidance¹, with EBIT before exceptional items as well as before VALUE 21 costs and free cash flow significantly exceeding guidance¹. Leoni is furthermore issuing guidance² for the 2022 financial year: Sales are expected to be slightly above € 5 billion, EBIT before exceptional items³ is expected to be in the mid double-digit million euros and free cash flow, including cash from the disposal of the Business Group Industrial Solutions, is expected to be positive in the low three-digit million euros.

The reason for this favourable development compared to the 2021 guidance is the strong business performance towards the end of the year, which was marked, among other factors, by better-than-expected customer demand. The impact of short-notice disruptions to the production of car manufacturers on our sales and earnings was less than anticipated. The development in the price of copper, currency effects as well as operational improvements underpinned the performance. The better than previously assumed recovery of free cash flow in the fourth quarter was the result above all of our significantly stronger earnings as well as a substantial decrease in net working capital, due among other things to higher factoring volumes.

Based on the budget that the Supervisory Board approved today, Leoni AG is furthermore issuing an outlook² on the current 2022 financial year. Despite the positive performance towards the end of 2021, Leoni still sees itself facing a number of challenges and volatile markets. Additionally, there will be effects related to the shifting of the Company's portfolio towards becoming a focussed provider of wiring systems to the automotive industry. As the sale of the Business Group Industrial Solutions was closed in January 2022, its contribution to sales and earnings is only included pro-rata in the forecast for fiscal 2022.

Sales are expected to slightly exceed € 5 billion. The full compensation for the already completed business disposals is a result of the expected further recovery in demand, especially in the automotive business, and the consistently higher copper price. From today's perspective, however, in some cases significantly higher raw material, energy and logistics costs, increases in personnel costs as well as the absence of the earnings contribution from the Business Group Industrial Solutions will weigh on EBIT before exceptional items³ compared with 2021. We consequently project EBIT before exceptional items³ in the mid double-digit million euro range. Based on current expectations, free cash flow for fiscal 2022 will be positive in a low three-digit million euro range. This figure includes the cash inflow from the sale of the Business Group Industrial Solutions, which needs to be taken into consideration. Excluding this sale, free cashflow would be expected to be negative.

The final results of the fourth quarter of 2021 as well as the 2021 financial year and our complete guidance for fiscal 2022 will be released on 23 March 2022.
 

¹Guidance for 2021: A significant year-on-year sales increase to at least € 5 billion and a significant year-on-year increase in EBIT before exceptional items as well as before VALUE 21 costs to at least € 100 million; a significant decrease in free cash flow compared to the previous year

²Based on the scope of consolidation as of 31 December 2021, however excluding Business Group Industrial Solutions from the time its sale was closed on 20 January 2022

³ The key figure "EBIT before exceptional items" for fiscal 2022 differs from the key figure "EBIT before exceptional items as well as before VALUE 21 costs" as reported for the preceding years. "EBIT before exceptional items" for fiscal 2022 adjusts earnings before interest and taxes (EBIT) exclusively for non-recurring effects related to refinancing the Group, M&A transactions and restructuring measures. The previously applied "EBIT before exceptional items as well as before VALUE 21 costs" additionally comprised adjustment for non-recurring costs related to the Covid-19 pandemic and the VALUE 21 programme as well as other exceptional items as impairments and provisions to cover contingent losses (cf. Leoni Annual Report 2020, especially on page 56). The comparably computed figure EBIT before exceptional items for 2021 would have amounted to about € 130 million.

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This announcement contains certain forward-looking statements that are based on the current assumptions and forecasts of Leoni AG's management. Various known and unknown risks, uncertainties and other factors could cause Leoni's actual results, its financial position, growth or performance to differ materially from the estimates presented herein. Leoni assumes no responsibility whatsoever to update such forward-looking statements or to conform them to future events or developments. Explanations of and reconciliations with key financial figures used for fiscal 2021 can be found in Leoni AG's Annual Report 2020 (accessible at https://publications.leoni.com/fileadmin/corporate/publications/reports/2021/leoni-annual-report-2020.pdf?1615935127), particularly on pages 56 and 104 et seq.
 

Contact for journalists

LEONI AG
Gregor le Claire
Corporate Press Officer
Phone: +49 911 2023-226
E-mail: [email protected]
 

Contact for investors / person responsible for this announcement

LEONI AG
Rolf Becker
Senior Manager Investor Relations
Phone: +49 911 2023-134
E-mail: [email protected]