New Risk • Jun 18
New major risk - Negative shareholders equity The company has negative equity. Total equity: -€378m This is considered a major risk. Being in negative equity means that the company's liabilities exceed its assets, meaning it owes more to creditors than it has in owned assets. While this doesn't mean the company is about to collapse, in the long-term, this is unsustainable. The company may have issues meeting financial obligations, is at risk of becoming insolvent and may have difficulty raising capital, especially more debt, if needed. Currently, the following risks have been identified for the company: Major Risks Share price has been highly volatile over the past 3 months (60% average weekly change). Negative equity (-€378m). Earnings have declined by 31% per year over the past 5 years. Minor Risk Market cap is less than US$100m (€10.5m market cap, or US$11.5m). Reported Earnings • Jun 17
Full year 2022 earnings released: €18.52 loss per share (vs €1.46 loss in FY 2021) Full year 2022 results: €18.52 loss per share (further deteriorated from €1.46 loss in FY 2021). Revenue: €5.09b (flat on FY 2021). Net loss: €604.9m (loss widened €557.2m from FY 2021). Revenue is forecast to stay flat during the next 2 years compared to a 4.6% growth forecast for the Auto Components industry in Europe. New Risk • Jun 12
New major risk - Revenue and earnings growth Earnings have declined by 29% per year over the past 5 years. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are declining over an extended period, then in most cases the share price will decline over time unless the company can turn around its fortunes. A trend of falling earnings can be very difficult to turn around. If the company is well already established it may also be a sign the company has matured and is in decline. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-€146m free cash flow). Share price has been highly volatile over the past 3 months (59% average weekly change). Earnings have declined by 29% per year over the past 5 years. Market cap is less than US$10m (€8.84m market cap, or US$9.50m). Minor Risk Latest financial reports are more than 6 months old (reported September 2022 fiscal period end). Announcement • Jan 10
LEONI AG Appoints Hans-Joachim Ziems as Chief Restructuring Officer, Effective January 10, 2023 The Supervisory Board of Leoni AG resolved to appoint Hans-Joachim Ziems as Chief Restructuring Officer (CRO) to the Executive Board with effect from 10 January 2023. Since the buyer surprisingly refused to close the sale of the Business Group Automotive Cable Solutions (BG AM), Hans-Joachim Ziems is to be responsible for the necessary adjustment of the refinancing plan and its implementation. Mr. Ziems was already a member of the Executive Board of Leoni AG in the CRO function from April 2020 to March 2021. Reported Earnings • Nov 16
Third quarter 2022 earnings released: €3.11 loss per share (vs €0.82 loss in 3Q 2021) Third quarter 2022 results: €3.11 loss per share (further deteriorated from €0.82 loss in 3Q 2021). Revenue: €955.1m (down 18% from 3Q 2021). Net loss: €101.7m (loss widened 279% from 3Q 2021). Revenue is forecast to stay flat during the next 3 years compared to a 5.1% growth forecast for the Auto Components industry in Europe. Over the last 3 years on average, earnings per share has increased by 59% per year but the company’s share price has fallen by 18% per year, which means it is significantly lagging earnings. Reported Earnings • Aug 16
Second quarter 2022 earnings released: €1.56 loss per share (vs €0.27 loss in 2Q 2021) Second quarter 2022 results: €1.56 loss per share (down from €0.27 loss in 2Q 2021). Revenue: €933.4m (down 28% from 2Q 2021). Net loss: €50.9m (loss widened 482% from 2Q 2021). Over the next year, revenue is forecast to grow 14%, compared to a 12% growth forecast for the Auto Components industry in Austria. Over the last 3 years on average, earnings per share has increased by 48% per year but the company’s share price has fallen by 2% per year, which means it is significantly lagging earnings. Announcement • May 24
Stark Corporation Public Company Limited (SET:STARK) signed an agreement to acquire Business Group Automotive Cable Solutions of LEONI AG (XTRA:LEO). Stark Corporation Public Company Limited (SET:STARK) signed an agreement to acquire Business Group Automotive Cable Solutions of LEONI AG (XTRA:LEO) on May 23, 2022. The transaction has an enterprise value of €560 million. The Business Group Automotive Cable Solutions generated sales of €1.3 billion in 2021. The completion of the sale is still subject to various closing conditions, including required merger control and investment control clearances, which are expected to be granted within six months. The closing of the transaction is also subject to the approval of LEONI Group‘s financing partners. The Board of Directors and the Supervisory Board of Leoni AG as well as the Board of Stark Corporation have already approved the transaction. The Company anticipates to complete the Proposed Transaction by November 30, 2022. Reported Earnings • May 13
First quarter 2022 earnings released: EPS: €1.44 (vs €0.85 in 1Q 2021) First quarter 2022 results: EPS: €1.44 (up from €0.85 in 1Q 2021). Revenue: €1.26b (down 6.8% from 1Q 2021). Net income: €47.1m (up 71% from 1Q 2021). Profit margin: 3.7% (up from 2.0% in 1Q 2021). Over the next year, revenue is expected to shrink by 2.2% compared to a 14% growth forecast for the industry in Austria. Over the last 3 years on average, earnings per share has increased by 30% per year but the company’s share price has fallen by 21% per year, which means it is significantly lagging earnings. Announcement • May 13
Leoni Ag Provides Earnings Outlook for the Financial Year 2022 LEONI AG provided earnings outlook for the financial year 2022. For the period, the company continue to expect lower sales, EBIT before exceptional items compared to initial guidance published on February 17. Buying Opportunity • Mar 24
Now 24% undervalued after recent price drop Over the last 90 days, the stock is down 7.6%. The fair value is estimated to be €12.37, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 3.9% per annum over the last 3 years. The company became loss making over the last 3 years. Announcement • Jan 22
Bizlink Holding Inc. (TWSE:3665) completed the acquisition of Business Group Industrial Solutions from LEONI AG (XTRA:LEO). Bizlink Holding Inc. (TWSE:3665) entered into binding legal agreement to acquire Business Group Industrial Solutions from LEONI AG (XTRA:LEO) for an enterprise value of approximately €450 million on October 1, 2021. The consideration will be in cash and will be financed with existing cash and committed financing. BizLink Holding Inc. to acquire LEONI AG's Industrial Solutions business group with Speedy Industrial Supplies Ptd Ltd to fully acquire LEONI Special Cables (China) Co. Ltd., with EA Cable Assemblies GmbH to fully acquire LEONI elocab GmbH, LEONI Special Cables GmbH, Silitherm S.r.l., LEONI Industry Slovakia Spol. s.r.o., LEONI Industry Verwaltungs-GmbH, LEONI Systems Spain S.L.U. All seven legal entities listed will be 100% owned by BizLink Holding Inc. Business Group Industrial Solutions reported a revenue of €430 million in 2020. The transaction is subject to Leoni AG's financing banks, customary closing conditions and the receipt of required regulatory approvals. The Executive Board and the Supervisory Board of Leoni AG as well as the Board of Bizlink have already approved the sale. The transaction is expected to close in early 2022. The expected cash inflow of more than €300 million after deduction of, among other things, financial liabilities and pension charges is to be used by LEONI AG to improve liquidity. The transaction is expected to be accretive to Bizlink immediately upon closing. Gwyneth Gu, Thomas Gilles, Fang-Yi Jen, Joachim Ponseck, Arthur M. Swierczok, Kathrin Marchant, Johannes Teichmann, Lena Kern, Anahita Thoms, Andreas Schulz, Rembert Niebel and Sonja Klein of Baker McKenzie acted as the legal advisors to BizLink Holding. Daniel Wiegand, Elisabeth Kreuzer, Simon Patrick Link, Matthias Scheifele, Matthias Rothkopf, Dirk Uwer and Moritz Rademacher of Hengeler Mueller Partnerschaft von Rechtsanwälten mbB acted as legal advisor to LEONI AG in the transaction.
Bizlink Holding Inc. (TWSE:3665) completed the acquisition of Business Group Industrial Solutions from LEONI AG (XTRA:LEO) on January 20, 2022. Announcement • Dec 11
Weinert Industries AG agreed to acquire J-Plasma Gmbh, LEONI Fiber Optics GmbH and LEONI Fiber Optics, Inc. from LEONI AG (XTRA:LEO). Weinert Industries AG agreed to acquire J-Plasma Gmbh, LEONI Fiber Optics GmbH and LEONI Fiber Optics, Inc. from LEONI AG (XTRA:LEO) on December 10, 2021. The closing of the transaction is still subject to the agreement of various boards as well as customary closing conditions, including merger control, and is expected in the first quarter of 2022. Reported Earnings • Nov 13
Third quarter 2021 earnings released: €0.82 loss per share (vs €1.60 loss in 3Q 2020) The company reported a solid third quarter result with reduced losses, improved revenues and improved control over expenses. Third quarter 2021 results: Revenue: €1.17b (up 9.9% from 3Q 2020). Net loss: €26.8m (loss narrowed 49% from 3Q 2020). Over the last 3 years on average, earnings per share has fallen by 31% per year but the company’s share price has only fallen by 25% per year, which means it has not declined as severely as earnings. Announcement • Jun 23
Pierer Industrie AG made a voluntary public purchase offer to acquire an additional 9.6 % stake in LEONI AG (XTRA:LEO) for €39.2 million. Pierer Industrie AG made a voluntary public purchase offer to acquire an additional 9.6 % stake in LEONI AG (XTRA:LEO) for €39.2 million on June 22, 2021. Pursuant to the terms of the transaction, Pierer Industrie AG will acquire around 3.1 million shares in LEONI AG at €12.5 per share. As a result of the transaction, stake of Pierer Industrie AG in LEONI AG shall increase from 15.30% to 24.90%. The offer document will be published after the Federal Financial Supervisory Authority (BaFin) has authorized the publication. Reported Earnings • May 13
First quarter 2021 earnings released: EPS €0.85 (vs €2.05 loss in 1Q 2020) The company reported a strong first quarter result with improved earnings, revenues and profit margins. First quarter 2021 results: Revenue: €1.35b (up 20% from 1Q 2020). Net income: €27.6m (up €94.7m from 1Q 2020). Profit margin: 2.0% (up from net loss in 1Q 2020). Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 36 percentage points per year, which is a significant difference in performance. Announcement • May 04
LEONI AG Provides Earnings Guidance for the Year 2021 LEONI AG provided earnings guidance for the year 2021. The Board of Directors is raising its outlook for sales and earnings for the 2021 financial year. Nevertheless, in its current assessment for 2021, the Board of Directors now expects a significant year-on-year increase in Group sales (2020: EUR 4.1 billion) (previously: only in the low double-digit percentage range). This is based on the stronger than previously expected continuation of the recovery in demand in the automotive and industrial sectors and the significantly higher copper price, which will not have a significant impact on earnings. Announcement • Mar 19
LEONI AG Auditor Raises 'Going Concern' Doubt LEONI AG filed its Annual on Mar 17, 2021 for the period ending Dec 31, 2020. In this report its auditor, Deloitte & Touche LLP, gave an unqualified opinion expressing doubt that the company can continue as a going concern. Reported Earnings • Mar 18
Full year 2020 earnings released: €10.10 loss per share (vs €13.30 loss in FY 2019) The company reported a decent full year result with reduced losses and improved control over expenses, although revenues were weaker. Full year 2020 results: Revenue: €4.13b (down 15% from FY 2019). Net loss: €329.9m (loss narrowed 24% from FY 2019). Over the last 3 years on average, earnings per share has fallen by 95% per year but the company’s share price has only fallen by 39% per year, which means it has not declined as severely as earnings. Announcement • Mar 18
LEONI AG to Report Q3, 2021 Results on Nov 10, 2021 LEONI AG announced that they will report Q3, 2021 results on Nov 10, 2021 Is New 90 Day High Low • Feb 11
New 90-day high: €14.26 The company is up 125% from its price of €6.35 on 12 November 2020. The Austrian market is up 24% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Auto Components industry, which is up 16% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is €31.75 per share. Is New 90 Day High Low • Jan 26
New 90-day high: €10.57 The company is up 108% from its price of €5.08 on 27 October 2020. The Austrian market is up 37% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Auto Components industry, which is up 21% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is €32.64 per share. Is New 90 Day High Low • Jan 09
New 90-day high: €7.56 The company is up 48% from its price of €5.09 on 09 October 2020. The Austrian market is up 32% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Auto Components industry, which is up 19% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is €29.64 per share. Is New 90 Day High Low • Dec 24
New 90-day high: €7.06 The company is up 41% from its price of €4.99 on 24 September 2020. The Austrian market is up 25% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Auto Components industry, which is up 26% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is €33.84 per share. Announcement • Nov 19
LEONI AG, Annual General Meeting, May 19, 2021 LEONI AG, Annual General Meeting, May 19, 2021. Is New 90 Day High Low • Nov 13
New 90-day high: €6.64 The company is up 1.0% from its price of €6.55 on 14 August 2020. The Austrian market is up 6.0% over the last 90 days, indicating the company underperformed over that time. It also underperformed the Auto Components industry, which is up 13% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is €27.76 per share. Analyst Estimate Surprise Post Earnings • Nov 12
Revenue misses expectations Revenue missed analyst estimates by 0.6%. Over the next year, revenue is forecast to grow 8.3%, compared to a 3.3% growth forecast for the Auto Components industry in Austria. Reported Earnings • Nov 12
Third quarter 2020 earnings released: €1.60 loss per share The company reported a decent third quarter result with reduced losses and improved control over expenses, although revenues were weaker. Third quarter 2020 results: Revenue: €1.06b (down 7.9% from 3Q 2019). Net loss: €52.3m (loss narrowed 41% from 3Q 2019). Over the last 3 years on average, earnings per share has fallen by 105% per year but the company’s share price has only fallen by 52% per year, which means it has not declined as severely as earnings. Is New 90 Day High Low • Oct 21
New 90-day low: €4.64 The company is down 40% from its price of €7.69 on 22 July 2020. The Austrian market is down 3.0% over the last 90 days, indicating the company underperformed over that time. It also underperformed the Auto Components industry, which is up 7.0% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is €28.08 per share. Announcement • Oct 20
LEONI AG to Report Fiscal Year 2020 Results on Mar 17, 2021 LEONI AG announced that they will report fiscal year 2020 results on Mar 17, 2021 Announcement • Sep 24
LEONI AG to Report Q1, 2021 Results on May 12, 2021 LEONI AG announced that they will report Q1, 2021 results on May 12, 2021 