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 (75% 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 5.4% growth forecast for the Auto Components industry in Germany. 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 (75% 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 6.2% growth forecast for the Auto Components industry in Germany. 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. Price Target Changed • Nov 03
Price target increased to €10.00 Up from €8.63, the current price target is an average from 4 analysts. New target price is 45% above last closing price of €6.89. Stock is down 50% over the past year. The company is forecast to post a net loss per share of €0.10 next year compared to a net loss per share of €1.46 last year. 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 9.8% growth forecast for the Auto Components industry in Germany. 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 1% per year, which means it is significantly lagging earnings. Reported Earnings • May 14
First quarter 2022 earnings: Revenues exceed analysts expectations while EPS lags behind 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). Revenue exceeded analyst estimates by 2.2%. Earnings per share (EPS) also surpassed analyst estimates. Over the next year, revenue is expected to shrink by 2.2% compared to a 9.5% growth forecast for the industry in Germany. 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. Price Target Changed • May 11
Price target decreased to €9.10 Down from €10.50, the current price target is an average from 4 analysts. New target price is 13% above last closing price of €8.03. Stock is down 28% over the past year. The company is forecast to post earnings per share of €2.63 next year compared to a net loss per share of €1.46 last year. Price Target Changed • May 03
Price target decreased to €9.88 Down from €10.75, the current price target is an average from 4 analysts. New target price is 15% above last closing price of €8.60. Stock is down 29% over the past year. The company is forecast to post earnings per share of €2.63 next year compared to a net loss per share of €1.46 last year. Buying Opportunity • Mar 24
Now 24% undervalued after recent price drop Over the last 90 days, the stock is down 7.5%. The fair value is estimated to be €12.41, 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. 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. Price Target Changed • Oct 28
Price target increased to €11.42 Up from €10.60, the current price target is an average from 5 analysts. New target price is 8.7% below last closing price of €12.51. Stock is up 154% over the past year. The company is forecast to post earnings per share of €0.77 next year compared to a net loss per share of €10.10 last year. Price Target Changed • Aug 12
Price target increased to €10.60 Up from €8.00, the current price target is an average from 6 analysts. New target price is 27% below last closing price of €14.48. Stock is up 128% over the past year. 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 37 percentage points per year, which is a significant difference in performance. 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. Is New 90 Day High Low • Jan 29
New 90-day high: €11.69 The company is up 123% from its price of €5.25 on 30 October 2020. The German market is up 20% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Auto Components industry, which is up 28% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is €28.00 per share. Is New 90 Day High Low • Jan 13
New 90-day high: €7.82 The company is up 62% from its price of €4.82 on 14 October 2020. The German market is up 8.0% 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 €31.65 per share. Is New 90 Day High Low • Dec 24
New 90-day high: €7.05 The company is up 44% from its price of €4.88 on 25 September 2020. The German market is up 9.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Auto Components industry, which is up 34% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is €33.31 per share. Is New 90 Day High Low • Nov 14
New 90-day high: €6.59 The company is up 1.0% from its price of €6.51 on 14 August 2020. The German market is also up 1.0% over the last 90 days, indicating the company’s price trend is similar to the market over that time. However, it 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 €27.81 per share. 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. Analyst Estimate Surprise Post Earnings • Nov 12
Earnings beat expectations, revenue disappoints Revenue missed analyst estimates by 0.6%. Earnings per share (EPS) exceeded analyst estimates by 36%. Over the next year, revenue is forecast to grow 8.3%, compared to a 3.9% growth forecast for the Auto Components industry in Germany. Price Target Changed • Nov 05
Price target raised to €5.29 Up from €4.86, the current price target is an average from 9 analysts. The new target price is close to the current share price of €5.47. As of last close, the stock is down 58% over the past year. Is New 90 Day High Low • Oct 13
New 90-day low: €4.85 The company is down 36% from its price of €7.64 on 15 July 2020. The German market is up 4.0% over the last 90 days, indicating the company underperformed over that time. It also underperformed the Auto Components industry, which is up 11% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is €28.17 per share. Price Target Changed • Oct 04
Price target raised to €5.38 Up from €4.86, the current price target is an average from 10 analysts. The new target price is 7.9% above the current share price of €4.98. As of last close, the stock is down 55% over the past year.