Leoni says it is preparing a stock market listing or sale of its Wire & Cable Solutions (WCS) division, including the option of a partial sale after reviewing the existing group structure, including the Wiring Systems Division.
In the context of its previously announced Value 21 programme, Leoni has reviewed the existing group structure and strategy for division. This also included a review of the optimal future ownership structure of Wire & Cable Solutions (WCS) and Wiring Systems Division (WSD) to determine how both can achieve their full potential.
As communicated, Leoni’s board sees only very limited synergies between both divisions and intends to increase their operational independence. In this context, corporate support functions will transfer from the holding company to the divisions.
WCS increasingly focuses on advanced and intelligent cable solutions and services and WSD further enhances its energy and data solutions and services related capabilities.
Against this background, Leoni is preparing a separation of its WCS division through a stock market listing or sale. To date, no final decision has been taken in this regard.
Following a potential separation, Leoni’s primary focus would be on the development of its WSD division. To this end, Leoni has begun to mandate respective advisors.
“We believe both divisions will benefit from a separation,” said Leoni CEO, Aldo Kamper.
“This creates two clearly focused businesses, whose individual market and technological developments as well as investments can be better and more quickly implemented.
“We expect the decision to separate WCS from the group puts us in a position to focus our resources on WSD and strengthens our ability to further develop this business.”
With the focus on WSD, Leoni expects to be in a better position to focus on operational improvements and continue to build on its position in automotive wiring systems.
The supplier added it would be able to concentrate its resources on the transition of the company towards a global solutions provider for the automotive sector and aims to capture emerging opportunities on the energy and data side.
With its Wiring Systems Division becoming a systems supplier and development partner to its customers, Leoni is on the way to sell not only products, but increasingly provide services in engineering, architectural design and simulation.
In the area of electromobility, the company considers itself to be well placed with regard to both technology and market position to benefit from the on-going shift towards electric and hybrid vehicles.
The implementation of the company’s Value 21 programme is progressing according to plan to achieve sustainable gross cost savings targets of EUR500m (US$563m) per year by 2022 for the existing group (with a targeted EBIT margin impact of +2 3 %-pts and a targeted FCF yield impact of +4 5 %-pts).
Around 75 % of the savings are expected to be realised in WSD.