WCA July 2017

Industry news

Leoni, with about 79,000 employees worldwide, generated sales of €4.4 billion in the fiscal year 2016 (2015: €4.5 billion). Earnings before interest and taxes (EBIT) amounted to €78.1 million (2015: €151.3 million). At the financial statement press conference, Dieter Bellé, CEO and president, explained that this decline is mainly due to restructuring expenses of €31.4mn and losses due to a fraud case of approximately €40mn. On an adjusted basis, EBIT improved by about 12 per cent to €160.2 million (2015: €143.6 million). In 2016 the company’s two divisions – Wiring Systems Division (WSD) and Wire and Cable Solutions (WCS) – realised more than three per cent organic growth in terms of earnings before interest and taxes. Investments: In the 2016 financial year, Leoni invested €211 million in property, plant and equipment. This investment related mainly to the expansion of wiring systems production capacity in China, North Africa and Eastern Europe and rebuilding work at the plant in Kitzingen, Germany. Furthermore, about €134 million was invested in research and development. Projects in China, Mexico and India: WSD, which develops, produces and distributes ready-to-install cable harnesses for passenger cars and commercial vehicles, launched a reorganisation in 2016. One of the outstanding business activities was the acquisition of a 51 per cent stake in the Chinese wiring systems manufacturer Wuhan Hengtong Automotive. This step strengthens Leoni’s position in the Asian market as it now also supplies Dongfeng Peugeot Citroën Automobile, China’s second largest car manufacturer. In mid-2017 the new Leoni plant in Merida, Mexico, will start operation and strengthen the company’s position in America. The WCS division, which develops, manufactures and sells wires, strands, tapes and optical fibres as well as electromechanical components, enlarged its capacity to produce A bright future lies ahead

By Konrad Dengler

standard cables; commissioned a PVC processing line in China; and began its installation of an irradiation crosslinking line in India. Alongside the consistently good automotive cables business in Europe and the Americas, there was increased demand especially from the robotics, medical technology as well as automation and drive technology sectors. The division streamlined its portfolio in 2016 as part of its strategic realignment towards becoming a solution provider as well as a systems and development partner. To that end, it sold its Leoni Studer Hard GmbH subsidiary and initiated the disposal of its electrical appliance cables business, which is to be completed in the first half of 2017. On the other hand, Leoni acquired in February 2017 a two-thirds holding in Adaptricity AG, an ETH Zürich spin-off. Leoni will be able to deploy proprietary software that generates time series-based simulations, for example to optimise power distribution grids by applying SmartGrid technologies. The company will thereby contribute to intelligent power distribution. Leoni is now going to realise its ‘Factory of the Future’ project in the town of Roth near the company’s headquarters in Nuremberg and will be investing €90 million in the facility. The construction phase officially started on 5 th April this year. On a 134,000m² area buildings covering a total floor space of about 57,000m² will be erected with the intention of it being one of Europe’s most modern cable plants. Besides additional production capacity, the buildings will comprise a laboratory and development centre for innovative products and an educational and advanced training facility. Leoni expects to start step-by-step relocation of its ongoing production from the existing plant in Roth in early 2019. Relocation of the roughly 800 employees to the new factory is likely to be completed in mid-2020. automotive

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Wire & Cable ASIA – July/August 2017