Leoni expects full year 2021 EBIT before special items as well as before VALUE 21 costs and free cash flow to be significantly higher than its guidance and publishes guidance for 2022
Leoni AG / Keyword(s): Preliminary results/Predictions
Leoni expects full year 2021 EBIT before special items as well as before VALUE 21 costs and free cash flow to be significantly higher than its guidance and publishes guidance for 2022
17 February 2022 / 20:33 CET/CEST
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Leoni expects full year 2021 EBIT before special items as well as before VALUE 21 costs and free cash flow to be significantly higher than its guidance and publishes guidance for 2022
Nuremberg, February 17, 2022 – Leoni AG (ISIN: DE0005408884) has, based on unaudited provisional figures for the 2021 financial year, generated sales of approximately 5.1 billion euros (2020: 4 134 million euros), EBIT before special items as well as before VALUE 21 costs of around 170 million euros (2020: -59 million euros) and free cash flow of around –10 million euros (2020: -69 million euros). Sales were therefore in line with forecasts.1with EBIT before special items as well as before VALUE 21 costs and free cash flow significantly exceeding forecasts1. Leoni also publishes guidance2 for FY 2022: Revenue expected to be slightly above €5 billion, EBIT before exceptionals3 expected to be in the mid-double-digit EUR million range and free cash flow, including cash from the divestment of the Business Group Industrial Solutions, is expected to be positive in the low triple-digit EUR million range .
The reason for this favorable development compared to the 2021 guidance is the good commercial performance at the end of the year, marked, among other things, by better than expected customer demand. The impact of short-term disruptions to automaker production on our sales and earnings was less than expected. Copper price trends, currency effects and operational improvements supported performance. The better than expected free cash flow recovery in the fourth quarter is primarily the result of our significantly higher earnings as well as a substantial decrease in net working capital, due among other things to higher factoring volumes.
Based on the budget approved by the Supervisory Board today, Leoni AG also publishes an outlook2 for the current 2022 financial year. Despite the positive performance towards the end of 2021, Leoni still faces a number of challenges and volatile markets. In addition, there will be effects related to the reorientation of the Company’s portfolio towards becoming a targeted supplier of wiring systems for the automotive industry. As the sale of the Business Group Industrial Solutions was finalized in January 2022, its contribution to revenue and profit is only taken into account on a pro rata basis in the forecasts for the 2022 financial year.
Sales should slightly exceed 5 billion euros. The full compensation for the disposals of activities already carried out results from the continuation of the expected recovery in demand, in particular in the automotive sector, and from the constant rise in the price of copper. From the current perspective, however, in some cases significantly higher raw material, energy and logistics costs, increases in personnel costs as well as the lack of contribution to the result of the Business Group Industrial Solutions will weigh on the EBIT before exceptional items.3 compared to 2021. We therefore project EBIT before exceptional items3 in the mid-double digit range of one million euros. Based on current expectations, free cash flow for fiscal year 2022 will be positive in the low triple-digit range in millions of euros. This figure includes the cash inflow linked to the sale of the Business Group Industrial Solutions, which must be taken into account. Excluding this sale, free cash flow should be negative.
Final results for the fourth quarter of 2021 as well as full fiscal 2021 and our full guidance for fiscal 2022 will be released on March 23, 2022.
1Guidance for 2021: a significant increase in sales year-on-year to at least €5 billion and a significant increase in EBIT before exceptional items as well as before costs VALUE 21 year-on-year other to at least 100 million euros; a significant drop in free cash flow compared to the previous year
2Based on the scope of consolidation as of December 31, 2021, but excluding Business Group Industrial Solutions as of the closing of its sale on January 20, 2022
3 The key figure “EBIT before exceptional items” for the financial year 2022 differs from the key figure “EBIT before exceptional items as well as before VALUE 21 costs” as reported for the previous years. The “EBIT before exceptional items” for the financial year 2022 adjusts the earnings before interest and taxes (EBIT) exclusively for the non-recurring effects related to the Group’s refinancing, mergers and acquisitions operations and restructuring measures. The “EBIT before exceptional items as well as before VALUE 21 costs” previously applied further included an adjustment for non-recurring costs related to the Covid-19 pandemic and the VALUE 21 program as well as other exceptional items such as impairments and provisions to cover any losses (see Leoni Annual Report 2020, in particular on page 56). EBIT before special items calculated on a comparable basis for 2021 would have amounted to approximately 130 million euros.
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This announcement contains certain forward-looking statements based on current assumptions and forecasts of the management of Leoni AG. Various known and unknown risks, uncertainties and other factors could cause Leoni’s actual results, financial condition, growth or performance to differ materially from the estimates presented here. Leoni assumes no responsibility of any kind to update these forward-looking statements or to conform them to future events or developments. Explanations and reconciliations to the key financial figures used for the 2021 financial year can be found in Leoni AG’s 2020 Annual Report (accessible at https://publications.leoni.com/fileadmin/corporate/publications/reports /2021/leoni-annual-report- 2020.pdf?1615935127), in particular on pages 56 and 104 and following.
Contact for journalists
LEONI S.A.
Gregor le Claire
Corporate press officer
Telephone: +49 911 2023-226
Email: [email protected]
Contact for investors / person responsible for this announcement
LEONI S.A.
Rolf Becker
Senior Investor Relations Manager
Telephone: +49 911 2023-134
Email: [email protected]
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