Leoni provides catastrophic figures - dividend suspended - and now? - The shareholder

"Our result in 2018 is very disappointing and unacceptable, the problems are much more serious than previously seen and the surprisingly poor performance in the fourth quarter, especially in the Wiring Systems business unit, underlines the need for an in-depth performance program," says Aldo Kamper. , CEO of Leoni AG. The reasons for the poor development in the fourth quarter were higher start-up costs at the factory in Mexico.

Outlook below expectations
In 2019 a turnover of € 5.2 billion is expected, with an EBIT between € 100 and € 130 million.
Leoni will not meet the previous medium-term targets for 2020. The dividend must be suspended.
That is why the board of directors is writing an even stricter cost discipline for the company in the short term. "We are currently working on further performance measures and will explain details on this on 19 March", Kamper added.

Takeover possible?
The shares fall on their knees due to disappointing results and weak prospects. It was not so long ago that Leoni was back in fashion at the fair. Leoni would have been in merger talks with the Indian Motherson Sumi.
The Indians are positioned in the same way as the Franks. Details were not known.

Motherson Sumi is considerably larger than Leoni with an enterprise value of eight billion euros. At the fair, the Indians are also valued higher than the competitor from Germany. The KGV of Motherson Sumi is currently at 23 for the current year.
It is quite possible that Motherson Sumi will try again. Leoni has good products and is indispensable in the automotive sector. That would, however, be the only argument that would speak for a purchase of the Leoni share at the lower level.

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