Nuremberg, Germany – Leoni AG is “well on track” with plans to separate its Wire and Cable Systems (WCS) business, mulling a potential carve-out of sub-units from the division.
In a 12 Aug results statement, the components supplier said investors had signalled interest in individual parts of the division, as the business covers “a wide range of skills and variety of customers.”
“Leoni is therefore establishing the conditions for a partial sale and is preparing to carve out some sub-units accordingly,” the statement said.
The company statement went on to say that Leoni would only separate from units if a “fair value can be achieved and there are viable plans for the respective subdivisions.”
Among other products, the unit supplies TPE-based and elatomeric cables to the automotive, healthcare, energy and industrial segments.
In the second quarter of 2020, the division delivered sales of €296 million, down 34% year-on-year.
While healthcare, energy and infrastructure segments showed positive developments in the three months to end of June, Leoni said its automotive and industrial businesses continued to show declining volumes.
Second quarter order intake also fell to €260 million, down from €447 million a year ago.
Segment earnings (EBIT before exceptional items) plunged 175% to negative €12 million during the quarter, down from €16 million registered in 2019.
However, Leoni said the “overall attractiveness” of the businesses was still positive with varying degree of market interest for individual parts of the division.
Leoni announced in July last year that it was aiming to streamline its structure with a plan to either sell off or list its WCS business on the stock market.
The German automotive cables specialist aims to separate WCS, which is focused on cable solutions, from its other core business Wiring Systems Division (WSD) which specialises in energy and data systems.
Amongst others, the Leoni business supplies TPE-based and elatomeric cables to the automotive sector.