Leoni AG Positive Q1 2021 Results Show Recovery Momentum
On May 12, 2021,ย Leoni AGย reportedย 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 carveโout and moved ahead with key portfolio measures to stabilize the business on a sustainable basis.
CEOย Aldo Kamperย noted that Leoni built on improvements from previous quarters and reached important milestones, including the sale ofย Leoni Schweiz AGย and an agreement to divest lowโmargin units ofย 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 increasedย consolidated salesย compared with the first quarter of the previous year. This growth reflects a rebound in customer demand and the companyโs ongoing operational improvements.
The Group also improvedย EBIT before exceptional items and before VALUE 21 costsย toย โฌ39 million, compared to a loss ofย โฌ7 millionย in the same quarter of 2020. This turnaround resulted from both higher sales and efficiency gains across operations.
Free cash flow came in atย โโฌ100 million, which was substantially below the prior yearโs neutral figure. However, the earlier period benefited from substantial saleโandโleaseback 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 itsย VALUE 21 performance and strategy programย with determination. By March 31, 2021, the company had already realized aboutย โฌ600 millionย of the gross costโsavings potential identified under the program.
These savings support Leoniโs 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 inย strengthening its portfolio. The company closed the sale of the first WCS unit,ย Leoni Schweiz AG, at the end of March 2021. This step marks an initial milestone in the broader WCS carveโout.
Leoni also signed an agreement with a buyer consortium for the sale ofย Leoni Kerpen GmbHโs lowโmargin business units in Stolberg. With this transaction, more thanย 160 jobsย 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 ongoingย Covidโ19ย challenges and supply chain bottlenecks, Leoni raised its outlook forย fiscal 2021. The company now expectsย Group salesย to show aย significant increase, compared with its earlier forecast of only a low doubleโdigit percentage rise.
Leoni also anticipates thatย EBIT before exceptional items and before VALUE 21 costsย will improve significantly and at least reachย breakโevenย for the year. This upgraded guidance reflects confidence in the companyโs recovery path and the impact of its restructuring and portfolio measures.
