DGAP-Adhoc: Leoni AG expects negative impact on sales, earnings and free cash flow in financial year 2022 as a result of the war in Ukraine

Leoni AG expects negative impact on sales, earnings and free cash flow in financial year 2022 as a result of the war in Ukraine
 

Nuremberg, 14 March 2022 - The Board of Directors of Leoni AG (ISIN: DE0005408884) today decided to adjust its guidance for the 2022 financial year¹ as a result of the war in Ukraine and the related economic impact.

From today's perspective, Leoni expects lower sales, lower EBIT before exceptional items² and a lower free cash flow for 2022 compared to the previous guidance as a result of the war in Ukraine and the related economic impact.

In particular, the Board of Directors expects that reduced production volumes and partial production losses at its two sites in Ukraine cannot be fully compensated for in the course of the 2022 financial year. Leoni Group's local Russian business will also be affected by geopolitical consequences, such as sanctions. Furthermore, indirect effects such as production interruptions on customer and supplier side, which affect the course of business, cannot yet be estimated.

The Board of Directors is intensively examining various measures to compensate for these effects, including among others the possibility of duplicating production volumes. To this end, Leoni is working closely and constructively with its customers and suppliers to manage this exceptional situation. However, a reliable quantification of the direct and indirect impact of the war in Ukraine on the 2022 financial year is currently impossible due to high uncertainty, and the forecasting ability is significantly impaired.

For the current financial year, production of the two plants in Ukraine was planned to generate combined sales of less than € 300 million. For Leoni Group's activities in Russia, sales of less than € 100 million were budgeted.

Core assets in the companies of both markets are property, plant and equipment and inventories (around € 125 million) and could be at least partially impaired.
 

(1) Guidance for 2022: Sales to slightly exceed € 5 billion, EBIT before exceptional items in the mid double-digit million euro range and free cash flow will be positive in a low three-digit million euro range

(2) The key figure "EBIT before exceptional items" for fiscal 2022 differs from the key figure "EBIT before exceptional items as well as before VALUE 21 costs" as reported for the preceding years. "EBIT before exceptional items" for fiscal 2022 adjusts earnings before interest and taxes (EBIT) exclusively for non-recurring effects related to refinancing the Group, M&A transactions, restructuring measures as well as special costs in connection with the Ukraine war. The previously applied "EBIT before exceptional items as well as before VALUE 21 costs" additionally comprised adjustment for non-recurring costs related to the Covid-19 pandemic and the VALUE 21 programme as well as other exceptional items as impairments and provisions to cover contingent losses (cf. Leoni Annual Report 2020, especially on page 56). The comparably computed figure EBIT before exceptional items for 2021 would have amounted to about € 130 million.

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 for fiscal 2021 can be found in Leoni AG's Annual Report 2020, particularly on pages 56 and 104 et seq.

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Contact for journalists

LEONI AG
Gregor le Claire
Corporate Press Officer
Phone: +49 911 2023-226
E-mail: [email protected]
 

Contact for investors / person responsible for this announcement

LEONI AG
Rolf Becker
Senior Manager Investor Relations
Phone: +49 911 2023-134
E-mail: [email protected]