DGAP-Adhoc: Leoni AG: Leoni decides on implementation of its VALUE 21 performance and strategy programme and revises outlook for 2019

2019. március 17., vasárnap, 18:53





DGAP-Ad-hoc: Leoni AG / Key word(s): Strategic Company Decision/Forecast


Leoni AG: Leoni decides on implementation of its VALUE 21 performance and strategy programme and revises outlook for 2019


17-March-2019 / 18:53 CET/CEST


Disclosure of an inside information acc. to Article 17 MAR of the Regulation (EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.


The issuer is solely responsible for the content of this announcement.




Leoni decides on implementation of its VALUE 21 performance and strategy programme and revises outlook for 2019



Nuremberg, 17 March 2019 - The Board of Directors of Leoni AG of Nuremberg (ISIN DE 0005408884 / WKN 540888) decided today that, given the greater costs incurred due to ramp-up difficulties at the plant in Merida, persistently poor operating performance in the Wiring Systems Division and a further downturn in the market, it is no longer able to maintain its outlook for fiscal 2019 presented on 7 February. At this time the company is not providing an updated guidance for 2019. The detailed guidance issued in the annual report for 2018 is therefore no longer valid. Leoni now estimates about EUR 50 million burden due to Merida for 2019. In addition, anticipated performance improvements at other plants have not materialised. Overall, the company is facing a further challenging market environment, particularly in China. In addition, certain OEMs have significantly reduced their delivery expectations for the next months with respect to the Wiring Systems Division.



Furthermore, the Board of Directors decided today to implement its VALUE 21 performance and strategy programme. The objective is to sustainably improve both profitability and cash flow as well as to align the Company to promising and profitable business areas. As of 2022, VALUE 21 is expected to deliver full run rate structural savings of around EUR 500 million annually compared with 2018. To some extent, the savings will be offset by factors such as wage cost increases and price reductions. In a stable market environment, the net benefit of VALUE 21 should lead to an EBIT margin improvement of 2 to 3 percentage points compared with 2018 over the course of the next three years. Similarly, free cash flow should increase by 4 to 5 percentage points. The programme entails restructuring costs amounting to about EUR 120 million, around half of it related to headcount and most of which will incur in the 2019 and 2020 financial years.



In addition, the Board of Directors has identified business areas with annual sales of up to EUR 500 million for which the Company is considering all options. Furthermore, Leoni intends to change its corporate structure into a finance holding company that is lean and geared to functions relevant to the capital market with two divisions that operate entrepreneurially and are managed on a stand-alone basis.



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 of and reconciliations with key financial figures used can be found in the Annual Report 2017 of Leoni AG (accessible at https://www.leoni.com/fileadmin/corporate/publications/reports/2017/annual_report_2017.pdf), particularly on pages 63, 68, 73, 74, 137, 159, 170f., 210, 240, 241.



 



Contact person responsible for the announcement

Sven Schmidt

Corporate Public & Media Relations

Phone +49 (0)911-2023-467

Fax +49 (0)911-2023-231

E-mail presse@leoni.com











17-March-2019 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de



























Language: English
Company: Leoni AG

Marienstraße 7

90402 Nuremberg

Germany
Phone: +49 (0)911 20 23-234
Fax: +49 (0)911 20 23-382
E-mail: veroeffentlichung@leoni.com
Internet: www.leoni.com
ISIN: DE0005408884
WKN: 540888
Indices: SDAX
Listed: Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Hanover, Munich, Stuttgart; Regulated Unofficial Market in Tradegate Exchange; Madrid





 
End of Announcement DGAP News Service




788291  17-March-2019 CET/CEST







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