LEONI : generates an EBIT before exceptional items as well as before VALUE 21 costs and a free cash flow significantly above market expectations in the second quarter of 2021 and raises outlook for sales and earnings for 2021

LEONI generates an EBIT before exceptional items as well as before VALUE 21 costs and a free cash flow significantly above market expectations in the second quarter of 2021 and raises outlook for sales and earnings for 2021

Nuremberg - Based on preliminary figures for the second quarter of 2021, sales of Leoni AG, Nuremberg (ISIN: DE0005408884 / WKN: 540888), amounted to EUR 1.30 billion (Q2 2020: EUR 673 million), EBIT before exceptional items as well as before VALUE 21 costs was EUR 48 million (Q2 2020: EUR -96 million) and reported EBIT was EUR 27 million (Q2 2020: EUR -129 million). The free cash flow amounted to EUR -10 million (Q2 2020: EUR -244 million). The earnings figures and free cash flow for the second quarter of 2021 are significantly above current market expectations [1]. Against this background, the Board of Directors today decided to raise its outlook for sales and earnings for the full year 2021. It now expects a significant year-on-year increase (2020: EUR 4.1 billion) in Group sales to at least EUR 5 billion and a significant year-on-year increase (2020: EUR -59 million) in EBIT before exceptional items as well as before VALUE 21 costs to at least EUR 100 million for the full year 2021.

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The positive earnings development in the second quarter of 2021 is based on the continuation of the recovery in demand in the automotive and industrial sectors, volume and mix effects as well as positive effects from the VALUE 21 programme and the restructuring concept. The positive free cash flow development mainly results from higher earnings and increased factoring volumes.

Leoni expects to face a variety of challenges during the remainder of the year. These include, among others, the ongoing Covid 19 pandemic and the continuing bottlenecks in global supply chains, which are impacting the availability of critical components and materials and could lead to production disruptions of automotive manufacturers and at Leoni in the coming months.

Against the background of the positive development in the first half of the year, the Board of Directors nevertheless decided today to raise its sales and earnings outlook. It now expects a significant year-on-year increase (2020: EUR 4.1 billion) in Group sales to at least EUR 5 billion and a significant year-on-year increase (2020: EUR -59 million) in EBIT before exceptional items as well as before VALUE 21 costs to at least EUR 100 million for the full year 2021 (previous expectations: significant year-on-year increase in Group sales and significant year-on-year improvement of EBIT before exceptional items as well as before VALUE 21 costs, which should reach at least break-even, for full year 2021). Positive impacts on sales are related to the continuation of the recovery in demand in the automotive and industrial sectors and the significantly higher copper price. Positive effects on earnings are expected from positive volume and mix effects as well as positive impacts from the VALUE 21 programme and the restructuring concept.

For free cash flow, the Board of Directors continues to expect a significant decrease compared to the previous year (2020: EUR -69 million). Among the reasons for this expected free cashflow development are the increase in net working capital due to the stronger than expected sales recovery and the development of the copper price as well as the fact that some exceptional items in connection with the restructuring concept were already booked in 2020 but will become cash-effective in 2021. An example in that context are the restructuring provisions booked for the restructuring at the Stolberg site. Effects from possible further divestments or acquisitions are not included in the outlook.

The final results of the first quarter of 2021 are scheduled to be published on 11 August 2021.

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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 and reconciliations of key financial figures used can be found in the 2020 Annual Report of Leoni AG, in particular on pages 56, and 102ff.

[1] The analyst consensus collected by Vara Research GmbH is used to determine the market expectations. The analyst consensus for the second quarter of 2021 collected as of 22 July 2021 includes the following figures: sales of EUR 1,267.7 million, EBIT before exceptional items as well as before VALUE 21 costs of EUR 19.7 million, reported EBIT of EUR 2.7 million and free cash flow of EUR -74.6 million.