The automotive supplier has two plants in Ukraine. Production had to be temporarily interrupted because of the war.
(Photo: imago images/Ukrinform)
Munich According to its own assessment, the wiring harness specialist Leoni is on the mend – even though the company is in an uncertain environment at its two plants in the Ukraine. “Leonis made good progress on the path to sustainable recovery in the second quarter,” said CEO Aldo Kamper on Wednesday.
Sales in the core business with wiring systems rose by eight percent to EUR 879 million in the second quarter. At 14 million, the operating result (EBIT) before special items from the continued operations was roughly at the previous year’s level. The talks with customers about “compensation for the cost increases in raw materials” have been successfully continued, said Kamper.
Other automotive suppliers have also remained comparatively robust in recent months despite the global crises. Continental increased sales in the second quarter more than expected by 13 percent to 9.4 billion euros. ZF expects record sales of more than 40 billion euros for the year as a whole.
Warnings of a bankruptcy wave were recently given in the industry. “The black painting in the supplier industry is not justified,” said Frank Göller from the management consultancy Horváth, which advises numerous companies in Germany and Europe. The companies were able to pass on at least some of their increased costs to the car manufacturers.
Top jobs of the day
Find the best jobs now and
be notified by email.
Leoni has two plants near Lviv in western Ukraine. Production had to be temporarily interrupted. As a result, BMW and Volkswagen also had to temporarily stop the conveyors due to missing cable harnesses.
Funding secured for years to come
At Leoni, the business figures are currently difficult to compare due to portfolio changes. Consolidated sales from continued operations excluding the sold cable division fell by nine percent in the second quarter to EUR 933 million. However, the previous year’s figures still include the Industrial Solutions division, which was also sold at the beginning of the year.
Leoni had withdrawn the forecast for the full year in the spring because of the Ukraine war. The targeted group turnover of more than five billion euros is probably no longer achievable. The operating result (EBIT) before special effects will also be lower than the planned double-digit million figure, Leoni warned.
But overall, thanks to the “Value 21” restructuring program, the group is currently much more stable than at the beginning of the corona pandemic. At that time, Leoni was one of the first companies that had to take advantage of state aid. The federal and state governments gave guarantees for new loans. Now Kamper said that “together with our consortium banks, significant progress has been made in recent weeks to secure Leoni’s financing for the coming years”.
Last year, Leoni increased sales significantly from 4.1 to 5.1 billion euros. The operating result (EBIT) before special effects and restructuring costs amounted to 170 million euros after a loss of 59 million euros in the previous year.
More: Why the wave of bankruptcies among suppliers is failing.