Leoni AG Positive Q1 2021 Results Show Recovery Momentum
On May 12, 2021, Leoni AG reported Leoni AG positive Q1 2021 results, confirming that its operational recovery continued into the first quarter of 2021. The company also completed the first step of the WCS carve‑out and moved ahead with key portfolio measures to stabilize the business on a sustainable basis.
CEO Aldo Kamper noted that Leoni built on improvements from previous quarters and reached important milestones, including the sale of Leoni Schweiz AG and an agreement to divest low‑margin units of Leoni Kerpen GmbH. He emphasized that Leoni now focuses on disciplined execution of all actions that strengthen performance and efficiency.
Operational Performance: Higher Sales and Stronger EBIT
Leoni significantly increased consolidated sales compared with the first quarter of the previous year. This growth reflects a rebound in customer demand and the company’s ongoing operational improvements.
The Group also improved EBIT before exceptional items and before VALUE 21 costs to €39 million, compared to a loss of €7 million in the same quarter of 2020. This turnaround resulted from both higher sales and efficiency gains across operations.
Free cash flow came in at –€100 million, which was substantially below the prior year’s neutral figure. However, the earlier period benefited from substantial sale‑and‑leaseback transactions, while the Q1 2021 figure mainly reflects higher net working capital needs tied to the operational recovery.
VALUE 21 Program and Cost Savings
Leoni continued to execute its VALUE 21 performance and strategy program with determination. By March 31, 2021, the company had already realized about €600 million of the gross cost‑savings potential identified under the program.
These savings support Leoni’s efforts to streamline structures, sharpen its portfolio and improve profitability. Management aims to use VALUE 21 as a foundation for a leaner, more focused and more competitive business model.
Portfolio Measures: WCS Carve-Out and Asset Sales
In the first quarter, Leoni also made progress in strengthening its portfolio. The company closed the sale of the first WCS unit, Leoni Schweiz AG, at the end of March 2021. This step marks an initial milestone in the broader WCS carve‑out.
Leoni also signed an agreement with a buyer consortium for the sale of Leoni Kerpen GmbH’s low‑margin business units in Stolberg. With this transaction, more than 160 jobs can continue under new ownership at the same site, while Leoni sharpens its focus on more attractive core activities.
Updated Outlook for Fiscal 2021
Despite ongoing Covid‑19 challenges and supply chain bottlenecks, Leoni raised its outlook for fiscal 2021. The company now expects Group sales to show a significant increase, compared with its earlier forecast of only a low double‑digit percentage rise.
Leoni also anticipates that EBIT before exceptional items and before VALUE 21 costs will improve significantly and at least reach break‑even for the year. This upgraded guidance reflects confidence in the company’s recovery path and the impact of its restructuring and portfolio measures.
