Leoni to separate from Wire+Cable Solutions
Cable producer Leoni announces the intension to liquidate the Wire+Cable Solutions division - either via going public or divestiture, and possibly also through the sale of units. After a separation, the group would focus primarily on the development of the wiring system area.
Nuremberg/D (Leoni) – The decision to divest the Wire+Cable Solutions division (WCS) was taken after examining the existing Group structure and strategy for the divisions as part of the “Value 21” savings program. This includes reviewing the future ownership structure for WCS and the Wiring Systems Division (WSD) to determine how both divisions can realize their potential. Corresponding consultants are already mandated.
The Management Board of Leoni AG sees only minor synergies between the two areas. Their operational independence is to be increased. In this respect, central functions are to be transferred from the holding company to the divisions: WCS is increasingly concentrating on cable solutions and services, while WSD is to expand its expertise in the area of energy and data solutions and services. The implementation of Value 21 is going according to plan, informs the company.
The gross cost savings targets – 500 million Euros per annum – are to be achieved by 2022 for the existing Group with a targeted effect on the EBIT margin of plus 2% to 3% and on the ratio of free cash flow to sales of plus 4% until 5%. Three-quarters of the savings are expected to be realised in the WSD area. In addition, one works on the existing refinancing needs. Here you consider all options into consideration, reports the company.