Annual Report 2012

Transcrição

Annual Report 2012

08.indd 1
Annual Report 2012
The Quality Connection
LEONI Group
Forecast for 2012
Consolidated sales
€ billion
3.8 to 4.0
EBIT
€ million
230 to 280
Capital expenditure 1
€ million
155 to 185
Free cash flow 2
€ million
50 to 80
Net financial liabilities
€ million
280 to 310
Equity ratio
%
> 30
Return on capital employed
%
> 20
1
without acquisitions
2
Target attainment 2012







3.81
235.8
154.2
63.5
249.2
35.4
20.8
Forecast for 2013







approx. 3.7
approx. 170
approx. 190
approx. 50
approx. 250
approx. 35
approx. 15
before acquisitions and divestments
11.03.13 08:10
Consolidated sales
€ million
2008
2,912.0
2009
2,160.1
2010
2,955.7
2011
3,701.5
2012
3,809.0
Consolidated sales by region 2012
Other foreign countries 8.2 %
NAFTA 13.7 %
EU (without Germany) 35.6 %
BRIC incl. South Korea 15.5 %
Germany 27.0 %
Consolidated EBIT
€ million
2008
55.7
2009
(116.3)
2010
130.7
2011
237.1
2012
235.8
Operating cash flow
€ million
2008
132.7
2009
88.8
2010
142.3
2011
246.1
2012
211.7
Key figures
IFRS
Sales
Earnings
2009
2008
3,701,487
2,955,671
2,160,117
2,911,964
27.0
28.8
31.8
34.4
31.4
EU (without Germany) [ % ]
35.6
39.4
39.5
42.0
44.6
Non EU countries [ % ]
37.4
31.8
28.7
23.6
24.0
Wire & Cable Solutions [ % ]
42.1
45.3
44.7
43.3
48.1
Wiring Systems [ % ]
57.9
54.7
55.3
56.7
51.9
EBITDA [ € ‘000 ]
352,013
344,186
241,006
(4,862)
165,913
EBIT [ € ‘000 ]
235,811
237,141
130,724
(116,319)
55,684
6.2
6.4
4.4
(5.4)
1.9
20.8
24.0
13.9
(12.0)
5.4
Income / loss before taxes (from continuing operations) [ € ‘000 ]
197,888
196,250
89,599
(157,309)
15,760
Consolidated net income / loss [ € ‘000 ]
156,021
155,959
67,246
(138,081)
5,197
Depreciation and amortisation [ € ‘000 ]
116,202
107,045
110,282
111,457
110,229
Cash provided by operating activities [ € ‘000 ]
211,710
246,105
142,297
88,783
132,726
Cash used for capital spending activities [ € ‘000 ]
125,499
126,901
95,512
87,000
137,256
Balance sheet Property, plant and equipment, intangible assets, goodwill [ € ‘000 ]
917,691
837,693
809,617
796,567
839,423
Net debt [ € ‘000 ]
249,169
233,922
444,558
495,367
533,225
Equity [ € ‘000 ]
845,128
737,481
481,160
369,126
447,688
35.4
31.8
23.8
21.0
24.2
Equity [ ratio in % ]
19.2
18.1
20.6
24.6
20.5
59,393
60,745
55,156
49,822
50,821
93.0
93.4
93.2
92.4
91.7
932.7
841.2
978.6
485.6
385.8
Consolidated net income / loss per share [ € ]
4.76
4.99
2.26
(5.04)
0.17
Dividend per share [ € ]
1.50 *
1.50
0.70
0.00
0.20
Personnel expenses [ % of sales ]
Employees [ as per 31 Dec. ]
Employed abroad [ % ]
Share
2010
3,809,007
EBIT margin [ % ]
Employees
2011
Germany [ % ]
Group [ € ‘000 ]
ROCE [ % ]
Cash flow
2012
Market capitalisation 31 Dec. [ € million ]
* Subject to approval by shareholders at the Annual General Meeting
This Annual Report is published in German
and English. In case of doubt or conflict,
the German language version will prevail.
LEONI – The Quality Connection.
The LEONI Group operates worldwide, providing wires, optical fibers,
cables and cable systems as well as related services for applications in
the automotive sector and other industries. The Company employs more
than 59,000 people in 32 countries.
3
Shareholders’ Letter
Dr Klaus Probst
2012 was another good financial year for LEONI. With consolidated sales of € 3.81 billion we set a new record,
and the earnings before interest and taxes (EBIT) of about € 236 million almost matched the previous high set
in fiscal 2011. At just over € 156 million, consolidated net income was on the previous year’s level. The Management Board and Supervisory Board will therefore propose to shareholders at the Annual General Meeting a
dividend of € 1.50 per share once again.
Perceptible sales and earnings growth, which was still considered possible at the beginning of 2012, was not
attainable due to the gradual weakening in the global economy. Particularly the demand from some carmakers, but also from customers in other industries, dropped appreciably during the second half of the year.
In addition, our strategic acquisition of the outstanding 50 percent equity in the South Korean wiring
systems specialist Daekyeung, meanwhile LWS Korea, affected the course of our business. The full takeover
of this former joint venture partner, which operates production facilities in China, contributed to the increase
in our sales and improved our position on the Asian market considerably. Due to the weaker demand for various car models, for which LWS Korea supplies wiring systems, as well as unexpectedly high integration and
start-up costs, the company fell short of our expectations and weighed significantly on our consolidated net
result. These problems were resolutely addressed from the second half of the year onwards, and LWS Korea is
meanwhile on the right track.
There was also an exceptional boost to earnings in 2012: the sale of our subsidiary LEONI Studer Hard AG,
whose activity in the field of medical technology product sterilisation did not fit our core business, yielded a
large amount of non-recurring income that offset the charges stemming from LWS Korea.
Our good business performance in 2012 is to a large extent thanks to our employees. On behalf of the
Management Board, I thank all staff of the LEONI Group very much for the work they have put in and for their
great commitment.
4
To ensure that LEONI’s good performance is long term we further sharpened and implemented our corporate
strategy as reformulated in 2011. It is geared to profitable, sustained expansion. In the medium term, we are
aiming for a return on capital employed (ROCE) of more than 20 percent and an EBIT margin of 7 percent. To
meet these targets, we are guided Group-wide by four strategic levers: globalisation, innovation, system business and efficiency.
Major progress was made in each of these areas in 2012.
The focus of globalisation is on the BRIC countries including South Korea and on the NAFTA area. In 2012
LEONI therefore – along with the complete takeover of Daekyeung – set up or expanded production capacity
in Brazil, China, India, Canada, Mexico and Russia. The focus in this respect was on facilities for producing wiring systems and automotive cables. We also stepped up our development and sales activity in these regions
and expanded into additional, highly promising markets such as Japan and the Middle East.
We are boosting our power of innovation by way of enlarged engineering capacity and optimised development structures to give creative ideas for new products and solutions even more space. Promising innovations
were launched in many areas of business in 2012 – particularly for the motor vehicle industry, but also in the
medical technology sector or for infrastructure applications. We showcase some of these in the magazine section of this Annual Report.
Numerous innovations simultaneously underpin our expertise in the system business. In 2012 this was
achieved, for example, with new products for vehicles with alternative drive technology, solar thermal plants
and glass fiber wiring of households. To enhance our systems expertise relating to plugs and connectors for
wiring systems, we also set up a dedicated business unit during the year under report, into which we also
brought outside know-how.
The fourth strategic lever concerns the ongoing raising of efficiency to compensate for the persistently
heavy pressure on prices in many of our customer industries. LEONI is working on this across all of its business
divisions with numerous individual measures. The objective is to raise efficiency perceptible per year.
5
Alongside economic factors, sustainability aspects also play an increasingly important role in LEONI’s performance. This is reflected, for instance, in our many products and solutions for environmentally-friendly technologies as well as our participation in the UN Global Compact. As a member of this United Nations initiative,
LEONI submitted the binding Communication on Progress concerning sustainable activity for the first time last
year. This Annual Report also devotes its own section to this topic, for example reporting in detail on the trend
in energy consumption and CO2 emissions.
A solid financial base is essential in order to implement our strategic projects. That is why it was important
to us to be early in securing the refinancing due in 2013: with our successful placement of a borrower’s note
loan in the amount of € 250 million and by signing a loan agreement with the European Investment Bank in
the amount of € 100 million on favourable terms. We also raised our equity ratio last year to more than
35 percent, thereby already exceeding our medium-term target.
With these measures, LEONI is financially well equipped for the future. There will be numerous new product
start-ups and internationalisation projects in 2013, which will form a further important foundation for our
future expansion. These will, together with a probably slightly smaller amount of business of about € 3.7 billion, based on a conservative calculation result in an EBIT decrease to about € 170 million. 2013 will therefore
be a transitional year for LEONI. As early as 2014 we will, from today’s perspective, once again enter a growth
phase with considerable sales and earnings increases – thanks to our well-filled order book in the Wiring
Systems Division and the increasing internationalisation of the Wire & Cable Solutions Division. The main focus
will continue to be on the BRIC countries. In the subsequent years, too, we intend to grow profitably and faster
than our markets. For 2016 we project consolidated sales of about € 5 billion. The Management Board and all
staff would be delighted if you, our esteemed shareholders, were to continue to accompany us on this path.
We thank you for your confidence.
Dr Klaus Probst
President & CEO
LEONI develops and manufactures technically sophisticated
products for the motor vehicle industry – ranging from the
single-core cable through to the complete wiring system with
integrated electronics. The product range also encompasses wires
and strands as well as optical fibers; standardised cables; special,
hybrid and optical cables as well as completely assembled systems for customers in differing industrial markets. Products
specifically for application in environmentally friendly technologies are meanwhile gaining in significance. In the medium term,
LEONI aims to become the most innovative and leading cable
supplier for the green technology market. The Company also
benefits from the worldwide trends of globalisation, industrialisation & automation, environmental awareness & shortage of
resources, mobility, urbanisation and demographic change.
7
Content
Shareholders’ Letter
3
Company information
8
Supervisory Board report
9
Supervisory Board and Management Board
14
Review 2012
18
Main topic:
LEONI innovative
20
Corporate Governance report & statement
34
Declaration of Conformity
LEONI Share
Group Management report
41
42
48
Business and underlying conditions
49
Reports by division / Segment report
65
Earnings, financial and asset situation
79
Other performance indicators
90
Sustainability report
100
Disclosures pursuant to Art. 315 (4) of the German Commercial Code
107
Supplementary report
109
Risk and opportunity report
109
Forecast
122
Consolidated financial statements
Consolidated income statement
130
131
Consolidated statement of comprehensive income
132
Consolidated statement of cash flows
133
Consolidated statement of financial position
134
Consolidated statement of changes in equity
135
Notes
136
Scope of consolidation
210
Audit Opinion
212
Responsibility statement
213
Additional information
Extract from the financial statement of LEONI AG
214
215
Appropriation of profits
217
Ten-year overview
218
UN Global Compact Index
220
Glossary
222
Index of key words
224
Company information
9
Supervisory Board
and Management Board
14
Review 2012
18
Main topic:
LEONI innovative
20
Corporate Governance
34
LEONI Share
42
9
Dr Werner Rupp
Dear Shareholders,
LEONI AG’s Supervisory Board again dealt in depth with the situation and performance of the group of companies during the past financial year. It conscientiously and diligently fulfilled its duties in accordance with
statutory requirements and the provisions of the Company’s Articles of Association, at all times standing at the
Management Board’s side, providing advice as well as assisting and monitoring its work.
Trustful collaboration with the Management Board
The Management Board always involved the Supervisory Board directly and in good time in any decisions
of key significance to the Company. The deliberations between the Management Board and the Supervisory Board were at all times constructive, open and defined by mutual trust. The Supervisory Board was, for
instance, informed regularly, immediately and comprehensively about all matters pertinent to LEONI involving
strategy and planning as well as the Group‘s operating performance and situation including its risk situation, risk management and compliance. Deviations in business performance from the prepared planning and
targets were explained in detail. To perform its duties, the Supervisory Board was able as early as at the time it
prepared for its meetings to draw, among other information, on detailed written and promptly provided Management Board reports. All topics, especially transactions requiring consent, were thoroughly discussed during the Supervisory Board’s meetings. The Management Board and Supervisory Board also kept in close touch
outside their scheduled meetings. In addition, the chairmen of the Management Board and the Supervisory
Board consulted on matters requiring agreement at short notice, both regularly on a fixed day every month
and as warranted by events. The Board was comprehensively informed of the content of these discussions
during its next meeting at the latest.
Focal areas of monitoring and discussion
The Supervisory Board held five regular meetings during the 2012 financial year, specifically on 19 March,
16 May, 19 July, 20 September and 5 December. September’s meeting took place in Romania at the facility of
LEONI Wiring Systems in Bistrita, above all in order to provide the members newly elected to the Supervisory
Board on 16 May with direct insight into the production of wiring systems. The Supervisory Board had a quorum on each occasion. With the exception of the meeting on 20 September, which two members could not
attend, all members were present at the meetings. There were no conflicts of interest involving Supervisory
Board members in relation to exercise of their office during the period under report.
The topics that were regularly discussed during the Supervisory Board meetings in 2012 included both the
current business performance and the opportunities as well as risks that arose from the economic slowdown
during the year. In addition, the effectiveness of the risk management system, financial, capital investment
and human resource planning as well as the operating targets were key points of the Board’s decision making
in all meetings. During its meetings in May, September and December the Supervisory Board also comprehensively discussed both the pending quarterly and half-year reports.
Company information
10
In addition to regular topics, the annual financial statements of LEONI AG and the Group for the 2011 financial
year were on the agenda for the first meeting on 19 March 2012. The Supervisory Board approved both sets
of statements without any objections. There was, furthermore, comprehensive discussion of the sale of the
sterilisation business as well as of the subsidiary responsible for this business, LEONI Studer Hard AG, and of the
Wire & Cable Solutions Division‘s plans to set up a facility in India. The Supervisory Board studied both projects
in depth and approved them.
The constituent meeting of the newly elected Supervisory Board was held on 16 May 2012 after the Annual
General Meeting. Other topics for this meeting included the partial refinancing of the LEONI Group required at
the latest in 2013 and approval of the corresponding options for action.
The purchase of key assets of the US company Richard Losch, Inc., a specialist in high-precision laser applications, was a key topic for the meeting on 19 July. The Supervisory Board comprehensively discussed the
opportunities and risks involved in this plan and ultimately approved it without reservation. In addition, the
Board discussed the impact of the new version of the German Corporate Governance Code dated 15 May 2012
and decided on corresponding changes.
During its meeting on 20 September, the Supervisory Board decided on an update to its Rules of Procedure.
Specifically, the decision involved more precise wording concerning the principles of independent exercise
Corporate
Governance report
page 37
of mandates as legally required and recommended in the updated Corporate Governance Code ( Corporate
Governance report). In addition, the Board examined the budgets for the coming year and analysed the impact
of the various economic scenarios on the performance of the LEONI Group. It also decided on the appointment
of Dr Andreas Brand as a further member of LEONI AG’s Management Board and approved his appointment as
Managing Director of LEONI Bordnetz-Systeme GmbH.
On 5 December 2012, the Supervisory Board conferred on the business planning for the 2013 financial year
as well as the medium-term planning through to 2017 as prepared by the Management Board, both of which
were adopted after in-depth discussion. In addition to covering the latest on the “Factory of the Future”
project in Roth, another important topic involved reviewing the regularity of the collaboration between the
Management Board and the Supervisory Board based on the legal requirements as well as the recommendations and suggestions of the Corporate Governance Code. In particular, the review focused on matters of
collaboration between the Management Board and the Supervisory Board for the benefit of the Company,
agreement on strategic alignment and transactions of fundamental importance, the Supervisory Board’s supply of information, the manner in which discussion is conducted and observance of confidentiality as well as
preparation for the meetings of the Supervisory Board.
The review was carried out with the assistance of an outside auditor commissioned by the Supervisory
Board, who confirmed the regularity of the collaboration between the two Boards in a detailed statement following correspondingly thorough examination. The intention is also to further develop this collaboration with
the help of the findings of the review.
Company information
11
Furthermore, the Board adopted the targets for compensating the Management Board members for fiscal
2013 through to 2015 and reviewed the efficiency of the Supervisory Board‘s work.
The Supervisory Board’s meetings on 19 March and 20 September were both held partly without the
Management Board members. On these occasions the Board discussed personnel and remuneration matters
such as Management Board compensation and the change to compensation for members of the Supervisory
Board. Another topic involved signing a consultancy agreement between the Company and Mr Lamann for the
period following his departure from the Management Board with the aim of continuing to take advantage of
his knowledge and experience for the benefit of the Company.
In order once again to conform to all the recommendations of the German Corporate Governance Code in
the future, the Supervisory Board also decided to propose to shareholders at the Annual General Meeting a
new system for compensating Supervisory Board members ( Compensation report) and it therefore also
determined to issue a new
be accessed on the
Declaration of Conformity. It is reproduced in this Annual Report and may also
website. With the exception of the modified rule on Supervisory Board compensation,
LEONI conforms to all of the recommendations in the latest version of the Corporate Governance Code, and
likewise to all of the suggestions.
Work of the committees
LEONI AG’s Supervisory Board formed four committees. They are the Audit Committee, the Personnel Committee and the Nomination Committee as well as the Arbitration Committee pursuant to Article 27 (3) of
Germany’s Co-determination Act. The committees raise the efficiency of Supervisory Board work by dealing
in detail with complex subjects outside the actual meetings and preparing the findings for a vote by the whole
Board.
The Audit Committee met on a total of four occasions during the past financial year. In particular during its
March meeting, the Committee analysed the principal findings of the audit of the 2011 financial statements
and prepared the proposal for nomination of the auditors for the 2012 financial year. In May the focus was on
the interim report on the 1st quarter of 2012. During its August meeting the Committee discussed the half-year
report and evaluated the effectiveness of the compliance and internal control systems set up at LEONI. In November the Committee reviewed the effectiveness of the existing risk management system and its interaction
with the internal control system. The committee members also discussed the nine-month report.
The Personnel Committee likewise met four times during the 2012 financial year. The most important topics
were preparation of a proposal for the service contract of Dr Andreas Brand as well as analysis of the pensions
for retired Management Board members and the Management Board compensation.
The Nomination Committee, which held two meetings in the past year, dealt in depth with the impact of the
updated German Corporate Governance Code on LEONI. In this connection, the Committee prepared, among
other things, proposals for a new compensation system for Supervisory Board members and reviewed the
independence of the members on the shareholder side.
There was no meeting of the Arbitration Committee pursuant to Article 27 (3) of Germany’s Co-determination Act (MitbestG) during the 2012 financial year.
Compensation report
page 59
page 41
www.leoni.com
12
Audit of the annual financial statements
The Annual General Meeting of LEONI AG’s shareholders on 16 May 2012 appointed the Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft, Stuttgart as auditors for the 2012 financial year. Ernst & Young audited and
Audit opinion
page 212
granted an
unqualified certificate for the 2012 financial statements and the management report of LEONI
AG prepared in accordance with the German Commercial Code as well as the consolidated financial statements and the group management report prepared in accordance with IFRS. The auditors responsible pursuant to Article 319a (1) Sentence 4 of the German Commercial Code (HGB) were Mr Ralf Broschulat and Mr Gero
Schütz.
Mr Schütz headed the audit for the first time in the year under report. Ernst & Young assigned Mr Broschulat as
auditor in charge of the audits for the fifth year in succession. The management reports describe the situation
of the AG and of the Group as well as the future risks and rewards in an appropriate manner. The auditors also
gave the quality of the risk management system a favourable verdict.
The annual financial statements of the Company and of the Group, the management reports and the audit
reports were available to all members of the Supervisory Board in good time. The Audit Committee preexamined these documents during its meeting on 11 March 2013. These financial statements and reports
were comprehensively discussed during the regular meeting of the Supervisory Board on 19 March 2013. The
auditing company’s representatives took part in both meetings, reported on the findings of their audits and
were available to provide additional information. With respect to the accounting process, they confirmed the
effectiveness of the risk management and internal control systems to the Supervisory Board. The auditors
gave written assurance, furthermore, that they did not perform any significant services other than to audit the
financial statements for LEONI AG during the year under report and that there are no circumstances that might
compromise their independence. The final audits of the annual financial statements and the management
reports of the AG and the Group by the Supervisory Board did not give rise to any objections. The members
of the Supervisory Board approved the annual financial statements of the AG and the consolidated financial
statements for fiscal 2012 as prepared by the Management Board. The financial statements of LEONI AG have
thus been duly adopted. The Supervisory Board supports the Management Board’s proposal to pay out a
dividend as in the previous year of € 1.50 per share for fiscal 2012.
Changes in personnel
After a total of 50 years, the work of Ernst Thoma for LEONI AG came to an end for age-related reasons on the
day of the Annual General Meeting on 16 May 2012. Mr Thoma joined the Company in 1962 and was appointed
to its Management Board in 1970. As the Board’s Chairman from 1977 to 2002, he laid the foundations for the
Group’s globalisation. Thereafter he was the Supervisory Board’s Chairman until 2007, and subsequently its
Deputy Chairman. Also on behalf of the Management Board and all staff members, the Supervisory Board
sincerely thanks Mr Thoma for his untiring commitment and his vision in managing the Company. We wish
him all the best for the future.
Shareholders at the Annual General Meeting elected Dr Werner Lang, born 1967, as their new representative
on the Supervisory Board in place of Mr Thoma. With his experience as an entrepreneur, Dr Lang provides the
Supervisory Board with valuable know-how. Axel Markus was elected as a new substitute member in place
of Benno Schwiegershausen, who also withdrew. Employees newly elected Richard Paglia to the Supervisory
Board as the representative of managerial staff. He replaces Ralf Huber, who withdrew as employee representative. The Supervisory Board thanks Mr Huber and Mr Schwiegershausen for their consistently constructive collaboration. This means that the Supervisory Board currently has no former members of the Company‘s
Management Board as members. The average age of the shareholder representatives on the Supervisory
Board was 60.8 years at the end of the period under report.
There were also significant changes on LEONI AG’s Management Board in 2012. Uwe H. Lamann, a Management Board member for many years, left the Group for age-related reasons when his contract expired at the
end of 2012. He had headed the Wiring Systems Division since 1999, which, under his management, has grown
to become one of the world‘s largest wiring systems manufacturers. We thank Mr Lamann for his great commitment and wish him all the best for the future as well.
To succeed Mr Lamann the Supervisory Board appointed Dr Andreas Brand, who joined LEONI AG on
1 October 2012 and took charge of the Wiring Systems Division on 1 January 2013. The Supervisory Board
wishes to thank the Management Board members as well as all employees of the LEONI Group for their
endeavour in 2012, thanks to which the Company succeeded in generating one of the best performances in its
history despite the economic weakness that became palpable towards the end of the year. At the same time,
we wish them every success in mastering the challenges of the current financial year.
Nuremberg, 19 March 2013
Dr Werner Rupp
Chairman of the Supervisory Board
Company information
13
14
Supervisory Board
Members of the Supervisory Board
Memberships on statutory supervisory boards
and other governance bodies
Chairman
Dr Werner Rupp | 65 | Burgthann
Chairman of the Management Board of
NÜRNBERGER Beteiligungs-Aktiengesellschaft, Nuremberg
(until 31.12.2012);
Spokesman of the Management Board of
NÜRNBERGER Lebensversicherung AG, Nuremberg
(until 31.12.2012)
Chairman of the Supervisory Board of NÜRNBERGER
Beamten Lebensversicherung AG, Nuremberg (until 31.12.2012);
Pensionsfonds AG, Nuremberg (until 31.12.2012);
Pensionskasse AG, Nuremberg (until 31.12.2012);
Deputy Chairman of the Supervisory Board of NÜRNBERGER
Beamten Allgemeine Versicherung AG, Nuremberg (until 31.12.2012);
Krankenversicherung AG, Nuremberg (until 19.06.2012);
Versicherung AG Österreich, Salzburg, Austria (until 31.12.2012);
Member of the Supervisory Board of Fürst Fugger Privatbank KG,
Augsburg (until 31.12.2012);
Chairman of the Administrative Board of NÜRNBERGER Beratungsund Betreuungsgesellschaft für betriebliche Altersversorgung
und Personaldienstleistungen mbH, Nuremberg (until 31.12.2012);
Chairman of the Administrative Board of NÜRNBERGER Versicherungsund Bauspar-Vermittlungs-GmbH, Nuremberg (until 31.12.2012).
1st Deputy Chairman

Franz Spieß* | 56 | Büchenbach
2nd senior authorised signatory of the administrative office in
Schwabach of the IG Metall trade union
—
2nd Deputy Chairman
Ernst Thoma | 78 | Nuremberg
(until 16.05.2012)
Member of the Advisory Board of Dehn & Söhne GmbH & Co. KG,
Neumarkt
retired
Gabriele Bauer * | 57 | Prichsenstadt
Chairwoman of the group works council
—
Josef Häring* | 51 | Grafenwiesen
Chairman of the works council
—
Ingrid Hofmann | 58 | Hiltpoltstein
Managing Director of I.K. Hofmann GmbH
—
Ralf Huber * | 49 | Nuremberg
(until 16.05.2012)
Senior Vice President Corporate Risk Management/
Corporate Compliance at LEONI AG
—
Karl-Heinz Lach* | 54 | Eschweiler
Chairman of the workforce council
—
* Employee representatives
Memberships on statutory supervisory boards
and other governance bodies
Dr Werner Lang | 45 | Ergersheim
(from 16.05.2012)
Managing Director of Lang Verwaltungsgesellschaft mbH and
Member of the Supervisory Board of MEKRA Lang Otomotiv Yan Sanayi
thereby of MEKRA Lang GmbH & Co. KG, Ing. H. Lang GmbH & Co. KG, A. S., Ankara, Turkey
Lang Technics GmbH & Co. KG as well as Grundstücksgesellschaft
Lang GbR
Richard Paglia* | 46 | Allersberg
(from 16.05.2012)
Senior Vice President Strategic Purchasing
at LEONI Kabel Holding GmbH
—
Dr Bernd Rödl | 69 | Nuremberg
Auditor, tax consultant, solicitor at Rödl & Partner GbR
—
Wilhelm Wessels | 60 | Oberhembach / Pyrbaum
Management Consultant
Member of the advisory board of TriStyle Mode GmbH & Co. KG, Fürth
Member of the Administrative Board of STAEDTLER Noris GmbH,
Nuremberg
Helmut Wirtz * | 62 | Stolberg
1st senior authorised signatory of the administrative
office in Stolberg of the IG Metall trade union
Member of the Supervisory Board of Aurubis AG, Hamburg
2nd Deputy Chairman
Prof. Dr Klaus Wucherer | 68 | Ungelstetten / Winkelhaid
(from 16.05.2012)
Managing Director of Dr. Klaus Wucherer
Innovations- und Technologieberatungs-GmbH
Member of the Supervisory Board of DÜRR AG, Bietigheim-Bissingen
Member of the Supervisory Board of SAP AG, Walldorf
Member of the Supervisory Board of Heitec AG, Erlangen
Member of the Supervisory Board of Festo AG & Co. KG, Esslingen
Committees of the Supervisory Board
Arbitration Committee
pursuant to Article 27 (3) of Germany’s Co-determination Act
(MitbestG)
Dr Werner Rupp, Chairman;
Franz Spieß; Gabriele Bauer; Ernst Thoma (until 16.05.2012);
Prof. Dr Klaus Wucherer (from 16.05.2012)
Audit Committee
Ernst Thoma, Chairman (until 16.05.2012);
Dr Bernd Rödl, Chairman (from 16.05.2012);
Ralf Huber (until 16.05.2012); Richard Paglia (from 16.05.2012);
Dr Werner Rupp; Franz Spieß
Personnel Committee
Dr Werner Rupp, Chairman;
Franz Spieß; Ernst Thoma (until 16.05.2012); Gabriele Bauer (from
16.05.2012); Prof. Dr Klaus Wucherer (from 16.05.2012)
Nomination Committee
Dr Werner Rupp, Chairman; Ernst Thoma (until 16.05.2012);
Dr Bernd Rödl (from 16.05.2012); Prof. Dr Klaus Wucherer
* Employee representatives
Company information
Members of the Supervisory Board
16
Management Board
Dr Klaus Probst
President & CEO,
in charge of the Wire & Cable Solutions
Division, Member of the Management
Board since 1997.
Dr Klaus Probst was born in 1953 in
Nuremberg, studied chemical engineering at the University of Erlangen and
earned a doctorate in engineering. He
began his professional career in 1980 as
a planning engineer at Großkraftwerk
Franken AG, a regional energy supplier. In
1989 he joined LEONI AG as head of the
plant in Roth. In 1997 he was appointed
to the Management Board, which he has
chaired since 2002.
Company information
Dieter Bellé
Dr Andreas Brand
Uwe H. Lamann
in charge of Finance, Controlling and
in charge of the Wiring Systems Division
in charge of the Wiring Systems Division
Labour Affairs,
(from 1 January 2013),
(until 31 December 2012),
Member of the Management Board
Member of the Management Board since
Member of the Management Board from
since 2000.
1 October 2012.
1999 to 2012.
Dieter Bellé was born in 1956 in Ham-
Dr Andreas Brand, born 1966 in Werneck,
Uwe H. Lamann, born in 1949 in Wessling,
burg. From 1979, after studying business
completed his production engineer-
studied telecom engineering in Cologne.
administration in Cologne, he worked
ing studies in Erlangen as a doctor of
From 1976 he worked in various positions
in various commercial positions in the
engineering. His career took him via
at Siemens AG in Munich, London and
Krupp Group, Felten & Guillaume AG
Motorola and Grundig to Continental AG,
Regensburg, where he was, among other
and as managing director of Peguform
where he was most recently an execu-
areas, in charge of the Chassis & Safety
GmbH. In 2000 he was appointed to the
tive of the Chassis and Safety division. In
Systems business segment.
Management Board of LEONI AG, where
2012 he joined the Management Board
As a member of LEONI AG’s Management
he took charge of most of the corporate
of LEONI AG where he took charge of the
Board from 1999 to 2012 he was in charge
departments.
Wiring Systems Division at the beginning
of the Wiring Systems Division.
of 2013.
18
2012 Review
Q1
Q2
LEONI acquires the outstanding
50 percent of the shares in its
former joint venture partner Daekyeung. The company, which has
meanwhile been renamed LEONI
Wiring Systems Korea, will in the
future strengthen our position
in Asia.
LEONI presents its new range of
products and services for solar
thermal plants for the first time at
the 2012 Hanover Trade Fair. The
full range of cables and complementary engineering services for
solar power plants enhances our
expertise as a systems provider in
the renewable energy market.
Implementation of LEONI’s group
strategy begins. With four levers,
i.e. globalisation, innovation,
system business and efficiency,
LEONI aims to further improve as
well as to expand in an earningsoriented and sustainable way in
the future, too.
January
February
March
The sale of Swiss subsidiary LEONI
Studer Hard, which did not match
our core business, focuses the portfolio covering irradiation services.
LEONI will concentrate on the
business involving electron-beam
crosslinking of plastics, which will
be expanded further.
April
May
The PSA Peugeot Citroën automotive group nominates LEONI as
Core Supplier.
The commendation recognises the
close collaboration that has been
ongoing for almost 40 years and
LEONI’s support for PSA’s globalisation strategy.
June
Within its Wiring Systems Division,
LEONI sets up the Business Unit
Connectivity to enhance its expertise specifically in the segment
comprising plugs and connector
systems.
Shareholders at the 2012 Annual
General Meeting approve payout
of € 1.50 per share for the previous
financial year. This therefore more
than doubled the payout, which is
based on the record result of 2011.
Q3
Company information
19
Q4
LEONI becomes an associated
partner in the Desertec consortium; an international network of
companies working on developing
a market for desert electricity. Our
cables and cable systems facilitate
an increase in the efficiency of
solar thermal and photovoltaic
power plants, thereby contributing
to this project‘s progress.
Together with Continental, LEONI
receives the CNA’s “Intelligence
for Transportation and Logistics”
innovation prize. The Center for
Transportation & Logistics Neuer
Adler e.V. (CNA) awards the production-ready high-voltage power distributor for vehicles with electric
drive, which the two companies
developed in close collaboration.
July
August
LEONI revises its forecast for 2012
as a whole downward because of
the slowdown in the automotive
business. Consolidated sales and
EBIT are projected to reach levels
similar to those of the very good
previous year.
September
LEONI successfully places a borrower’s note loan in the amount of
€ 250 million and is thereby early
in securing its long-term financing.
Due to the strong demand, the
amount is well above the one originally planned.
October
November
LEONI commissions its first cable
production facility in the Pune
region to take advantage of the
opportunities of the Indian market.
As a first step the facility will
produce automotive cables; in the
future it is to make cables for the
railway and solar industries as well.
December
LEONI opens a sales office in the
United Arab Emirates. This new
branch office in Dubai, which will
initially concentrate on high-end
cabling systems for such infrastructure projects as office buildings,
airports and shopping centres, will
enable LEONI to improve its tapping of the growth potential in the
Gulf States.
21
Innovations are an important part of LEONI’s strategy.
They strengthen market and competitive position –
both our own and that of our customers. And they
help, in dealing with such global trends as mobility,
urbanisation, demographic change and preservation of
resources, to align our business better.
LEONI’s innovations are applied in the motor vehicle
industry and such future-oriented sectors as medical
technology, telecommunications and energy supply.
They all benefit from the good ideas of our employees.
On the following pages you will discover more about
innovative solutions and processes at LEONI.
Company information
LEONI innovative
Wiring system
weight optimisation:
LEONI is optimising the
wiring system using the
Toodedis simulation system.
LEONI innovative | 23
Optimised design and alternative conductor materials
Company information
Cars made lighter
“In the development
of innovative automotive cables and wiring
systems, LEONI is a
the required conductive properties and network
provider ranging from
structures, diminishes the wiring system’s complex-
Daniel Biscan / vor-ort-foto.de
full-service systems
materials development through to
computer-aided
design of the best
possible wiring system
architecture.“
Ralf Kerbaum
Head of Engineering Design,
Wiring Systems Division,
facility Kitzingen, Germany
ity and significantly reduces conductor cross-section
by means of electrical and thermal simulation.
Another area addressed involves the materials.
At some point minimisation of traditional copper
conductors hits physical boundaries because, so as
to withstand the major strains in a car, diameters
cannot be reduced below a certain limit. By using
The car is becoming ever more safe and comfortable.
copper alloys, LEONI specialists have in some cases
At the same time, it should weigh as little as possible
succeeded in more than halving conductor cross-
to save fuel and reduce CO2 emissions. Intelligent
sections while maintaining the same mechanical
design and lightweight materials are therefore in
durability. LEONI’s newly developed aluminium
demand. This also applies to the wiring system;
busbar, a connecting rod between the battery and
an exceptionally complex network of cables and
engine that can be shaped on three dimensions, also
conductors that, even in a compact car, can weigh up
saves a lot of weight. It is space-saving and 40 to 60
to 25 kg. As early as the development stage, LEONI
percent lighter than conventional copper cables, of
contributes with multifaceted, innovative ideas to
course with identical quality.
make wiring systems that save as much as weight
and space as possible.
At the planning stage, for example, LEONI relies
on Toodedis (Tool for Dimensioning of Electrical Distribution Systems). This unique simulation
system, which we developed in-house, establishes
Lewis acid-base theory
Acid ions are released on the cable
surface by a special metal oxide
contained in the jacket material.
They lower the pH value on the
cable’s outer surface, rather like the
skin’s protective shield of acids.
metal oxides
acid ions
Antimicrobial cables
Company information
Skin as a perfect example
pH level
strong acid
0
efficiency
scope
1
2
3
4
skin
surface
neutral
soap solution
5
6
7
8
9
10
11
strong
alkaline solution
12
13
14
Many people worldwide are infected in hospitals
are frequently contaminated with bacteria that are
by multi-resistant bacteria. The causes are hygiene
transferred to people. A LEONI innovation combats
gaps: devices close to patients, such as ultrasound,
this: the antimicrobial cable. Its particular feature is
endoscopy and ECG equipment as well as the cables,
the cable jacket, which incorporates a special metal
oxide. This releases acid ions on the cable surface
“The effectiveness of
that lower the pH value – similar to what the protec-
our cables’ technology
tive shield of acids does on human skin. Bacteria
has been proven by
respond sensitively to this; their cell functions are
both recognised meas-
restricted and die.
urement methods and
Oliver Heinl / vor-ort-foto.de
independent hospital
hygiene experts.“
Peter Wechsler, Product Manager
for antimicrobial cables,
Wire & Cable Solutions,
facility Roth, Germany
The advantage of LEONI’s new process is that, in
contrast to other methods, the bacteria-killing effect
on the plastic surface is not compromised by handling, involving for instance perspiration or protein
residues.
These antimicrobial cables are suited for example for
x-ray, mammography, MRT and CRT devices, but also
for dental equipment. LEONI has already sold its first
antimicrobial cables for patient monitoring applications. In the future, use of this technology will also
be conceivable on the plastic surfaces of the devices
themselves.
Our innovative foam-coating
technology for preformed cable
harnesses ensures that the wiring
looms are fully protected against
diesel, petrol, engine oil, water,
dirt and road salt.
High temperature foam
Company information
When it gets really hot
“We have tested new
materials for this high
temperature foam
and further fathomed
their limits to achieve
Daniel Biscan / vor-ort-foto.de
lasting resistance to
the extremely high
temperatures in engine
compartments.”
Lisbeth Falk, Research and
Development Chemist,
Wiring Systems Division,
facility Kitzingen, Germany
The high temperature foam developed for this
purpose is made of polyurethane and withstands a
constant temperature of up to 130 °C – briefly even
It takes robust cables to build environmentally
up to 140 °C. Existing materials had to withstand just
friendly cars. Engines that meet the latest Euro 6
110 to a maximum of 120 °C. Another advantage is
standard generate a significant amount of heat un-
the new foam’s flexibility. A cable harness jacketed
der the bonnet, the reasons being improved engine
with it can be preformed ideally deployed in tighter
encasing and the increasingly tighter and tighter
engine compartments without damage to the
engine compartment space. LEONI already has cables
cables. Improved noise control provides additional
for multifaceted applications in its product range,
comfort.
which withstand extreme strain and temperatures.
Now there is also a solution for the heavy demands in
This high temperature foam has undergone compre-
the engine compartment of environmentally friendly
hensive testing at LEONI to ensure its resistance to
vehicles.
extreme temperatures and aggressive media as well
as its suitability for deployment in mass production. Initial customer samples have already been
produced and presented to potential buyers.
Chemical refrigeration
uses the endothermic
(heat absorbing) reaction of
chemicals to achieve quick,
once-off cooling.
Three construction
elements extruded in
a single operation.
Enables compact construction
and provides additional
protection.
Inner semiconductor
layer
Welded boundary
layers
Conductor
Copper multi-strand
compacted conductor
to IEC 60228
Outer semiconductor
layer
Welded boundary
layers
Dielectric
High-quality insulation
made of crosslinked
polyethylene
Aluminum shielding
Aluminum tape,
overlapped and glued,
transversely watertight
Semiconductor
sealing strip
Padded strip, longitudinally watertight
Sheath
Polyolefin copolymer,
single layer
Sealing strips
make cables longitudinally
waterproof. They prevent,
in the event of damage to
the jacket, the spread of damp
(for instance fire extinguishing
water) in a cable.
Thermal barrier
Intumescent intervening layer
Outer sheath
Polyolefin copolymer,
double layer
BETApower Fireprotec
Company information
Fire protection in public buildings
“Our BETApower
Fireprotec cable is
meeting with keen
interest, especially so
in Southeast Asia. The
Roland Schmid / vor-ort-foto.de
main focus is on use in
tall buildings.“
Dr Heiner Gradwohl
Head of Product Development,
facility Däniken, Switzerland
LEONI’s BETApower Fireprotec medium voltage cable
is free of hazardous substances and nevertheless
virtually incombustible. It is fire proof for 180 minutes
and thereby sets a new standard in the medium
Anyone who spends time in public buildings or on
voltage segment. At the same time it can, thanks
public transport relies on their safety. When railway
to its compact construction, be drawn through
stations, airports or underground trains, but also of-
conventional piping or across risers. It is nevertheless
fice complexes and shopping centres are built, safety
easy, simple, economical and quick to lay. BETApower
measures, among which fire protection first and
Fireprotec thereby provides new options for plan-
foremost, therefore play an especially big part. For
ning the supply and power generation plant in new
wiring this means the highest requirements in terms
buildings. The cable was developed based on our
of flame retardance and system integrity on the one
successful BETApower medium-voltage range.
hand as well as absence of hazardous substances
on the other, i.e. properties that are very difficult
to combine. LEONI has developed a solution to this
problem.
Planar waveguide production
process from specialty glass
through to the finished splitter component
1. Cutting and polishing:
6 inch wafers are cut from
specially made glass blocks
and their surfaces are
polished.
2. Coating and structuring:
the wafers get a metallic
coating. The waveguide
design is then transferred
to the metal coating by
means of photolithographic
structuring.
3. Ion exchange:
the wafers are dipped in a silver chloride solution. Silver ions penetrate
into the glass through openings in
the metal coating. The optical refractive index rises at these points, and
an optical waveguide is created.
4. On-chip isolation:
depending on product type, there are
currently up to 520 splitter chips on a
6-inch wafer. The chips are cut out with
a wafer saw.
5. Connecting the glass fiber
and chip:
the glass fibers are connected
to the inputs and outputs of the
waveguide chip.
6. Casing installation:
finally, the splitter is fitted into a casing.
Depending on the application, the splitter
can also be equipped with further accessories.
FiberSplit
Company information
Internet access with light
6 inch wafers with splitter structures to distribute from one input
signal to several outputs
“The ion exchange in
glass takes place in a
special glass developed by LEONI. This
LEONI has developed an innovative method by which
of optical waveguides
these splitters can be produced with special effi-
Carsten Büll / vor-ort-foto.de
involves the creation
in which light can be
directed or split.”
Dr Maria Kufner
Head of PLC Production & Technology,
facility Waghäusel, Germany
ciency. These splitters are made as planar waveguide
chips based on 6 inch wafers in a glass specially
devised for this purpose.
To manufacture these planar fiber optic cables we
make use of an innovative production method,
namely what is known as ‘ion exchange in glass’. This
technology is not only exceptionally efficient, but
A world without the internet is inconceivable
also very flexible. The optical transmission properties
nowadays. But in many countries there is still a lack
of the glass chip can consequently be widely varied.
of strong access. In China, for example, work on con-
LEONI FiberSplit can thus be deployed as a standard
necting every household to the internet is ongoing.
component in the telecommunications industry just
An ever increasing number of large, urban housing
as a special component for applications in, for exam-
blocks in the country are being fitted with glass fiber
ple, sensor, measurement or diagnostic systems.
connections. To be able to simultaneously supply
the numerous residential units in a building with ex-
LEONI is the world’s first manufacturer to have in-
tensive quantities of data, the fiber optic conductors
stalled a production line for this technology on a
reaching the building have to be split. This requires
6 inch basis. Among others, customers in the Chinese
what are known as fiber splitters.
telecommunications industry are testing the prototypes made there.
The high-voltage distributor
box developed by LEONI is
used to connect ancillary
devices.
Distributor boxes
Company information
Innovative expertise in the component segment
“The technical standards pertaining to
vehicles with alternative drive systems are
just being defined. This
therefore also calls
Shawn Spence Photography
For vehicles with electric drive we have, in collabora-
for new cable harness
components like the
high-voltage power
distributor.”
Martin Hopf, Project Manager for
Advanced Power Distributor Development, Wiring Systems Division,
facility Columbus, USA
tion with Continental, developed a high-voltage (HV)
power distributor that has already been awarded an
innovation prize. It is needed to connect to the wiring
system, alongside the main HV power units, such
ancillaries as the air-conditioning compressor, electric
heating and the charger. The distributor box fulfils
the particular demands with respect to safety and
electromagnetic compatibility that modern electric
Alternative or conventional drive models – which of
and hybrid vehicles impose on these important com-
these concepts will prevail in the future cannot yet be
ponents, and can be assembled in an application-
definitively answered. But no matter whether a car
specific way. LEONI has already gained customers for
is powered by electricity, petrol or hydrogen, it will
this new type of product and is about ready for the
always require a complex wiring system with a large
first series production.
number of electronic and electrical components.
The demands on these components are high: on the
LEONI has also developed a new control unit for con-
one hand in terms of cost and weight savings, on the
ventional vehicles: the Power Distribution Module,
other with respect to new voltage levels in the high-
abbreviated PDM. It serves as a power distributor
voltage segment for cars with electric drive. LEONI
in the engine compartment. The PDM’s novelty is
has acquired extensive know-how in this area and
that several fuses, relays and connector strips can
has enhanced the products it has on offer to include
be accommodated in the tightest of spaces and that
innovative power distributors.
weight, installation space and costs were reduced
thanks to a new kind of assembly concept. These
power distributors were successfully tested in the
lab and in the field; series production has already
commenced.
34
Corporate Governance report and statement
Corporate Governance at LEONI
LEONI is committed to maintaining responsible and transparent corporate governance, the basis of which
consists of statutory rules, LEONI AG’s Articles of Association, the rules of procedure for the Management Board
and Supervisory Board, and the German Corporate Governance Code (Code). These rules and guidelines are
observed in all decision-making processes. In line with the legal requirements for a German public company,
LEONI AG has a dual management system that is characterised by the separation of personnel between the
Management Board as the executive and business management body and the Supervisory Board as the monitoring body.
Hereinafter we report pursuant to Section 3.10 of the Code on our corporate governance as well as, in accordance with Article 289a of the German Commercial Code (HGB), on our key corporate governance practices.
Implementation of the German Corporate Governance Code
LEONI again endeavoured to fulfil all the recommendations and suggestions of the German Corporate
Governance Code during the period under report. Until 15 June 2012, all the recommendations and, with one
exception, also the suggestions of the Code’s version dated 26 May 2010 valid until then were fulfilled. On
15 May 2012 the Government Commission on the German Corporate Governance Code approved a new version
for the Code, which has been in effect since 16 June 2012. In this new version the Commission made a few
material adjustments, matched changes in legislation and incorporated suggestions from entities that apply
the Code. Among the items newly included is the recommendation that, so far as any performance-related
compensation is paid to supervisory board members, this should be geared to long-term business growth
(Section 5.4.6 (2) Sentence 2). The Management Board and Supervisory Board decided to review the Articles
of Association with respect to the compensation for Supervisory Board members to this effect and on
19 July 2012 issued, as a precautionary measure, a corresponding declaration pursuant to Article 161 of the
German Public Companies Act that drew attention to possible deviation from this point. All other Code updates
were fulfilled.
The thorough review of the arrangement governing compensation for Supervisory Board members found
that the recommended sustainability criterion is not sufficiently considered in the current Articles of Association with respect to the proportion of variable compensation. The Management Board and Supervisory Board
therefore decided to amend the compensation system for the Supervisory Board, in order to thereby once
again to conform to all of the recommendations of the Government Commission on the German Corporate
Governance Code without exception. The new system provides that Supervisory Board members shall in
future receive fixed compensation only. It constitutes a proper and fitting understanding of the obligations on
members of the Supervisory Board in a suitable manner and simultaneously prevents the effect of a distorting
incentive. The new ruling for Supervisory Board compensation will be laid down in the Articles of Association.
Any amendment to the Articles of Association is subject to the approval of shareholders at the Annual General
Meeting. The Supervisory Board will therefore submit a corresponding amendment proposal to shareholders at the upcoming Annual General Meeting on 30 April 2013. LEONI thus fulfils the recommendations of
the Code’s currently valid version with one exception. The suggestions are already being fully applied. The
Management Board and Supervisory Board confirmed this in an updated
Declaration of Conformity for 2012,
which was signed and published in December. It is reproduced in this Annual Report and may be viewed on
LEONI’s website, as can the declarations of the past five years.
page 41
www.leoni.com
Shareholders and Annual General Meeting
Each share in LEONI AG on principle has one vote. During the Annual General Meeting on 16 May 2012 all of
our shareholders were once again able to exercise their equal voting rights and enter into dialogue with the
members of both the Management Board and Supervisory Board on any agenda items.
The invitation to the Annual General Meeting and other information was sent electronically, provided that
this form of communication is accepted, to all financial service providers, shareholders and shareholder associations both in and outside Germany. The documents and reports for the Annual General Meeting were also
accessible on the
LEONI website in both German and mainly English. All other relevant information was also
www.leoni.com
published in this easily accessible way on the website and sent out electronically upon request.
During the Annual General Meeting on 16 May 2012, three voting right representatives were again available to shareholders not present to cast their votes as instructed, thereby making it easier for shareholders to
exercise their rights. Shareholders were able at any time to authorise and instruct these representatives, who
were available to all shareholders throughout the meeting.
Interested parties and shareholders who did not attend the Annual General Meeting were able to follow the
President & CEO’s speech and a presentation shown during this speech on the internet. These media documents will be available on our website until the next Annual General Meeting.
Corporate governance by the Management Board
The Management Board is responsible for the corporate governance of LEONI AG. It acts in the interests of
LEONI AG with the aim of raising its enterprise value on a lasting basis. To do so, the Board develops a suitable
strategy, agrees this with the Supervisory Board and ensures that it is implemented. Its duties also include
effective opportunity and risk management as well as controlling and ensuring of compliance (observance of
legal requirements and guidelines within the Company) throughout the Group.
Rules of procedure as established by the Supervisory Board govern collaboration and the division of tasks
among members of the Management Board. They also contain the departmental responsibilities of the
individual Board members, matters that are the responsibility of the whole Management Board, the required
majority as well as a catalogue of the types of transaction requiring the Supervisory Board’s approval.
The rules of procedure were not amended in 2012. This also applies to the compensation system for the
Management Board, which the Supervisory Board again reviewed in 2012. All the information on compensation for Management Board members is contained in the
Compensation report, which is part of the Group
Management Report. The Management Board members did not engage in any sideline work subject to mandatory notification during the period under report.
Compensation report
page 54
Company information
35
36
The Management Board of LEONI AG initially had three members in the year under report. The fourth quarter
of 2012 was a transition period when the Board comprised four members. This ensured the smooth handover
of Management Board responsibility for the Wiring Systems Division from Uwe H. Lamann, who left at the end
of 2012 for age-related reasons, to his successor Dr Andreas Brand. In line with the Code’s recommendation,
Dr Brand’s first appointment to the Management Board does not involve the maximum possible term.
Members of the Management Board:
Dr-Ing. Klaus Probst, Doctor of engineering, 59
First appointed:
1997 (with LEONI since 1989)
Appointed until:
2014
Areas of responsibility:
President & CEO, Head of the Wire & Cable Solutions Division as well as Management Board
member responsible for the Corporate Communications and Internal Audit departments
Dieter Bellé, Graduate in business administration, 56
First appointed:
2000
Appointed until:
2014
Head of the Accounting/Planning, Finance, Legal Affairs/Corporate Governance, Information
Management, Risk Management/Compliance, Investor Relations, Taxes, Controlling,
Information Security and Human Resources departments, Labour Director
Uwe H. Lamann, Graduate in engineering, 63
First appointed:
1999
Appointed until:
31/12/2012
Head of the Wiring Systems Division
Dr-Ing. Andreas Brand, Doctor of engineering, 46
First appointed:
1/10/2012
Appointed until:
2015
Head of the Wiring Systems Division from 1/1/2013
Work of the Supervisory Board
The Supervisory Board of LEONI AG monitors and advises the Management Board in running the Company. In
accordance with the German Co-determination Act, the Board has an equal number of six members representing shareholders and six members representing employees. Its composition is, furthermore, in line with the
latest Code requirements concerning diversity and appropriate participation of women as well as the criteria
of independence, experience, internationalism and expertise of the Supervisory Board members.
With respect to selection of suitable candidates for the Supervisory Board, the Board some time ago
adopted the Nomination Committee’s proposal of a detailed catalogue of criteria. This requirements profile
shows whether and to what extent a person is suited to taking on the duties of a member of the Company‘s
Supervisory Board and also comprises the objectives that the Board has stipulated for selecting suitable
people. The judged criteria thus include such factors as the independence, professional experience, especially
so in an international work environment, as well as other specific knowledge, experience and specialisations,
Company information
37
e.g. in the Company‘s areas of operation or the fields of accounting, risk management and compliance. The
requirements profile has also quite intentionally been worded in a gender-neutral way and thereby also takes
account of the latest Code recommendations in terms of the diversity criterion and an appropriate participation of women. Each criterion is weighted and assessed accordingly, thus providing a profile that is as well
rounded as possible and complements as well as enhances the experience and knowledge profile of the existing Supervisory Board member team as far as possible. The Supervisory Board has also decided upon and set
up a comparable procedure for selecting candidates for the Management Board with a similarly distinguishing
profile of suitability.
In line with due rotation, shareholders at the Annual General Meeting on 16 May 2012 elected their representatives on this board for the next five years. The shareholders newly elected Dr Werner Lang (Ergersheim)
as an ordinary member and Axel Markus (Schwabach) as a substitute member of the board. Ernst Thoma
(Nuremberg), the Supervisory Board’s chairman for many years and most recently its second deputy chairman as well as the former substitute member Benno Schwiegershausen withdrew. In place of Ralf Huber
(Nuremberg), who withdrew as their representative, employees on 26 April 2012 newly elected Richard Paglia
(Allersberg) to the Supervisory Board. All other members of the Board were reaffirmed in their offices. The
Supervisory Board elected Dr Werner Rupp as its chairman as well as Franz Spiess and Prof. Dr Klaus Wucherer
as his deputies. The members of the Supervisory Board and of the committees are introduced in the section
on the
Supervisory Board and Management Board.
The Supervisory Board’s work is governed by rules of procedure. Added to these rules after publication of
page 14
the updated Code was the requirement that all members of the Supervisory Board elected by shareholders
at the Annual General Meeting must at all times fulfil the criterion involving independent exercise of their
mandate in line with the Code, i.e. in particular that they do not have any personal or business relationship
with the Company or the boards of the Company. A corresponding examination of the current members on
the shareholder side found that all of them fulfil this criterion.
With the exception of Prof. Dr Klaus Wucherer, the members of LEONI AG’s Supervisory Board each hold a
maximum of three other supervisory board offices at market-listed companies or on supervisory bodies of
companies with similar requirements. Prof. Dr Klaus Wucherer has a total of five mandates. The Company will
give members of the Supervisory Board appropriate support in seeking, as is their personal responsibility, the
training and further education required to perform their duties. According to the currently applicable Articles
of Association, this also includes assumption of appropriate further education costs.
The
Compensation report provides information on the breakdown and amount of compensation for
Supervisory Board members as well as the planned new compensation system.
The Supervisory Board held five regular meetings in 2012. The shareholder and employee representatives
several times prepared meetings of the Supervisory Board separately. The Supervisory Board formed an Audit
Committee, a Personnel Committee, a Nomination Committee and an Arbitration Committee. After the Annual General Meeting, the Supervisory Board elected Dr Bernd Rödl to chair the Audit Committee. The Audit
Committee’s chairman is independent and not the chairman of the Supervisory Board, has financial expertise
covering the particular knowledge required for this office and has not sat on the Management Board in the
past two years.
Compensation report
page 57
38
The Supervisory Board regularly audits the efficiency of its work based on a comprehensive questionnaire. The
most recent efficiency audit took place during the meeting on 5 December 2012. In it the Supervisory Board
examined both matters arising and regularly recurring topics. Key elements of the efficiency audit include the
system for reporting and providing information put into practice by the Management Board, especially on
topics such as the corporate strategy and important measures as well as legal transactions, the composition of
the committees that have been set up and the passing on of information from the committees to the Board,
the collaboration and communication with the Management Board, the frequency of meetings including
the holding of meetings with the preparatory and follow-up work as well as monitoring of accounting, risk
management and compliance. The audit found generally a high level of approval among the Supervisory
Board members concerning the matters assessed. In the process, the Board members gave the quality of
the information provided by the Management Board and the culture of open communication an especially
high rating. The efficient approach with respect to succession planning for the Management Board was also
emphasized. The Board decided to further develop some procedures on the basis of findings from the audit in
order to improve the efficiency of the method of operation even more.
page 9
The
Supervisory Board report provides comprehensive information on the individual topics of the Super-
visory Board meetings and the work of its committees.
Collaboration between the Management Board and Supervisory Board
The Management and Supervisory Boards of LEONI AG collaborated closely and in mutual trust for the benefit
of the Company again during the year under report. The Management Board’s rules of procedure stipulated
the obligations on the Board concerning provision of information and reporting. During the Supervisory
Board meetings the Management Board and Supervisory Board discussed all key strategic decisions as well
as transactions requiring consent openly and based on maintaining strict confidentiality. The Management
Board agreed the strategy with the Supervisory Board, and discussed the status of implementation with the
Supervisory Board at regular intervals. The Management Board also kept the Supervisory Board comprehensively informed on a regular and up-to-date basis during the financial year about all key matters as well as the
planning, business performance, the risk situation and the compliance measures. In addition to the regular
Supervisory Board meetings, the chairmen of the Management Board and Supervisory Board discussed all
relevant, current matters on a fixed day every month.
During the year under report, the Supervisory Board reviewed the collaboration with the Management
Board as currently practised on all pertinent topics including those of compliance and corporate governance,
and also commissioned an outside expert’s appraisal in this regard. The review’s findings were very positive.
The knowledge and recommendations contributed will be taken into account with the objective of continued,
page 9
very good cooperation between the two Boards in the future. The
Supervisory Board report also contains
additional information on the collaboration between the Management Board and the Supervisory Board.
D & O insurance with an excess, which for the event of a claim for damages involves one and a half times the
individual member’s fixed annual compensation, was in place for members of the Management and Supervisory Boards during the year under report.
Compliance
Again during the year under report, the Management Board handled organisation of all compliance matters
and ensured implementation of the necessary measures. It regularly informed the Supervisory Board on the
latest status. The Supervisory Board monitored the corresponding activity. The organisation of compliance
Company information
39
was extended further during the period under report. Another particular focal area involved comprehensive
and worldwide training of managers and staff. For instance, the existing e-learning programme has already
been updated, and new e-learning programmes on further compliance topics were set up. Ultimately, all the
e-learning programmes were established worldwide at all relevant LEONI locations and in various languages.
You will find more information on this in the section headed
Risk and Opportunity report in the Group
Management report.
Risk and Opportunity report
page 112
Other corporate governance practices
Throughout the reporting period LEONI’s corporate governance was in line with recognised external standards and various of our own sets of rules in addition to the legal requirements and the German Corporate Governance Code. These include the UN Global Compact and the Diversity Charter as well as internal guidelines
like the LEONI Social Charta, the LEONI Code of Ethics and division-specific guidelines on quality and environmental policy, which can all be viewed on
LEONI’s website. You will find more information on this in the
Sustainability report.
www.leoni.com
page 100
Transparency
LEONI AG informed each of its shareholders, the shareholder associations, financial analysts, the media and
the interested public equally, promptly and comprehensively on the Company‘s performance and significant
events, for which the Company again made use of a wide variety of media during the period under report. All
mandatory publications as well as extensive supplementary information are always made available in a timely
manner on
LEONI’s website. The publications, such as ad hoc announcements, media releases, interim and
annual reports were always issued in both German and English. LEONI AG also broadcast conference calls as
well as the annual balance sheet press and analyst conferences for each of the relevant groups of people live
on the internet, where furthermore, immediately thereafter, the audio and video recordings are easily accessible for a limited period. The latest fiscal calendar, which provides information on the dates for all key releases
and events, can also be viewed on the website.
Accounting and audit of financial statements
The consolidated financial statements for fiscal 2012 as well as the condensed consolidated interim financial
statements in the 2012 half-year report and in the two quarterly reports of LEONI AG were prepared in accordance with the International Financial Reporting Standards (IFRS). At the Annual General Meeting on
16 May 2012 Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart were appointed as the auditors
for the year under report. The nomination was preceded by an examination of independence. This ruled out
any business, financial, personal and other relations between auditors and their corporate bodies as well as
chief auditors on the one hand and LEONI AG as well as members of its corporate bodies on the other hand
that might give cause to doubt the independence of the auditors. Ernst & Young issued a correspondingly
binding declaration of independence in this respect.
The Supervisory Board also agreed with the auditors that the latter would be notified without delay of findings and occurrences material to the duties of the Supervisory Board that arise during execution of the audit.
Accordingly, the auditors are obliged to advise the Supervisory Board, or note it in their audit report, if pieces
of information are found that point to incorrectness in the declaration pursuant to the Code submitted by the
Management and Supervisory Boards.
www.leoni.com
40
Directors’ Dealings and Shareholdings
All share transactions carried out by members of the Management Board and of the Supervisory Board as well
as parties related to them (Directors’ Dealings pursuant to Article 15a of the German Securities Trading Act)
www.leoni.com
were published on
LEONI’s website as soon as LEONI AG was advised to this effect. The following transac-
tions were reported in 2012:
Date
Notifying party, function
Issuer
Transaction subject to
mandatory disclosure
Place of transaction
20/02/2012 Ernst Thoma,
LEONI AG1
Member of LEONI AG’s Supervisory Board
Sale of 5,000 no-par-value LEONI
shares1) at a price of € 38.50 per share.
Total amount: € 192,500.00.
Xetra, Frankfurt
via UniCredit Bank AG
Nuremberg
18/05/2012 Dieter Bellé,
Member of LEONI AG’s Management
Board
LEONI AG1
Purchase of 2,000 no-par-value LEONI
shares1) at an average price of € 31.60
per share. Total amount: € 63,206.32
Xetra, Frankfurt
Nuremberg
18/05/2012 Dr Klaus Probst,
President & CEO of LEONI AG
LEONI AG1
Purchase of 2,500 no-par-value LEONI Xetra
shares1) at a price of € 31.586 per
via Sparkasse Nuremberg
share and of 3,500 no-par-value LEONI
shares1) at a price of € 31.749 each. Total
amount: € 190,087.89.
22/05/2012 Dieter Bellé,
Board
LEONI AG1
Total amount: € 56,049.00
21/05/2012 Uwe H. Lamann,
and
22/05/2012 Board
LEONI AG1
Purchase of 1,000 no-par-value LEONI Xetra
shares1) at a price of € 31.86 per share as via Raiffeisenbank Sinzing
well as 1,000 no-par-value LEONI shares1) at a price of € 32.36 per share on
21 May 2012 as well as purchase of
1,578 no-par-value LEONI shares1) at a
price of € 33.71 per share on
22 May 2012. Total amount: € 117,414.38
Xetra, Frankfurt
Nuremberg
05/07/2012 Dr Werner Rupp,
LEONI AG1
Member of LEONI AG’s Supervisory Board
Sale of 20,000 no-par-value LEONI
Total amount: € 655,000.00
Munich Stock Exchange via
Sparkasse Nuremberg
29/10/2012 Dr Klaus Probst,
President & CEO of LEONI AG
shares1) at a price of € 24.5497 per
share. Total amount: € 147,298.20.
Xetra via Sparkasse Nuremberg
1
LEONI AG1
WKN 540888, ISIN DE0005408884
Members of the Management Board and the Supervisory Board held shares issued by LEONI on
31 December 2012. These holdings broke down as follows:
Shareholdings
No. of shares on 31/12/2012
Percentage of share capital (32.669 million shares)
Supervisory Board members and related parties 7,058
0.02
Management Board members and related
parties
137,165
0.42
Supervisory Board and Management Board,
total
144,223
0.44
Updated declaration of the Management Board and Supervisory Board of LEONI AG in 2012 pursuant
to Article 161 of the German Public Companies Act (AktG) on the recommendations of the Government
Commission on the German Corporate Governance Code in its version of 15 May 2012 (most recently
published in the electronic Federal Gazette – Bundesanzeiger – on 16 June 2012)
The Management Board and Supervisory Board of LEONI AG on 23 November 2012 and 5 December 2012
approved the following Declaration of Conformity pursuant to Article 161 of the German Public Companies Act:
I. The Management Board and Supervisory Board declare that, from 16 June 2012, they have been conforming to the recommendations valid from that date of the Government Commission on the German Corporate
Governance Code in its version of 15 May 2012, with the following exception:
The Code recommends in Section 5.4.6 (2) Sentence 2 that any performance-related compensation paid to
Supervisory Board members shall be geared to long-term business growth.
Under Article 12 (2) of the current Articles of Association, the members of LEONI AG’s Supervisory Board
receive variable performance-related compensation geared to the company‘s distributable profit.
After thorough and final examination the Management Board and Supervisory Board hold the view that the
current compensation arrangement deviates from the Code recommendation on this point because the variable proportion of compensation does not sufficiently consider the recommended sustainability criterion.
The system for compensating the Supervisory Board is to be revised in the future. Any revised compensation
arrangement for the Supervisory Board requires an amendment to the Articles of Association. Such amendments can only be adopted by shareholders at the Annual General Meeting, however. The Supervisory Board
will therefore propose to shareholders at the Annual General Meeting on 30 April 2013 an amendment to the
Articles of Association on this point that will then fully correspond to the Code’s recommendation.
II. The Management Board and Supervisory Board of LEONI AG also declare that in future, too, they intend to
conform without exception to all the recommendations of the Government Commission on the German
Corporate Governance Code in its version of 15 May 2012.
Nuremberg, December 2012.
LEONI AG
On behalf of the Management Board
On behalf of the Supervisory Board
Dr Klaus Probst
Dr Werner Rupp
Company information
41
42
LEONI Share
Share price performance 2012
160
150
140
130
120
110
LEONI
100
DAX
MDAX
90
Indexed 30 December 2011
Jan
Feb
March
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Overview of LEONI share key data
First listed on
1 January 1923
Ticker symbol
LEO
ISIN
DE0005408884
WKN
DE540888
Class of shares
Ordinary bearer shares with no-par-value
Market segment
Prime Standard
Indices
MDAX
Share capital
€ 32,669,000
Number of shares
32,669,000
Multi-year overview of key LEONI share figures
Number of shares at yearend
Net income / loss
2012
2011
2010
2009
2008
in millions
32.669
32.669
29.700
29.700
29.700
€ / share
4.76
4.99
2.26
(5.04)
0.17
25.87
Equity
€ / share
23.65
16.20
13.46
16.75
Dividend
€ / share
1.50 1
1.50
0.70
0
0.20
Total payout
€ million
49.0 1
49.0
20.8
0
5.3
Payout ratio
%
31
31
31
0
> 100
High for the year 2
€ / share
40.21
42.31
34.81
17.10
36.06
Low for the year 2
€ / share
23.42
21.69
13.43
6.36
7.64
€ / share
28.55
25.75
32.95
16.35
12.99
6.0
5.2
14.6
—
76.4
5.3 1
5.8
2.1
0
1.5
Yearend closing price
2
Price / earnings ratio 3
Dividend yield 3
Market capitalisation on 31 Dec.
Average trading volume
1
2
3
%
1
€ million
933
841
979
486
386
no. of shares
284,545
343,845
237,628
192,800
309,487
Subject to approval by shareholders at the Annual General Meeting
Xetra closing price of the day
Based on yearend closing price
Encouraging market performance in 2012
The world’s equity markets closed the 2012 trading year mostly with significant gains even though prices were
generally flat until June. Positive impetus starting in the third quarter stemmed above all from the success
achieved in mastering the European sovereign debt crisis. Particularly the announcement by the European
Central Bank of massive support measures if required in case of emergency, but also gradual progress on the
governmental level, provided investors with relief. In addition there was the persistently expansive monetary
policy pursued by the central banks. These factors diminished concerns that the global economy might be
heading for another recession into the background despite the threat that the United States might fall over a
fiscal cliff. The once again more dynamic economic performance in China in the fourth quarter and the very robust state of the German economy underpinned this upbeat perspective. With a gain of about 29 percent, the
DAX was among the world‘s best performing key indices in 2012. The MDAX even rose by nearly 34 percent.
LEONI share up
Automotive and component supply sector shares were on the whole again exposed to greater fluctuations
than the overall market in 2012. This was due to factors including opposing trends in terms of demand for
cars: whereas the manufacturers were in a position to post new records in the United States and China,
performance in Europe was on the whole weak. In some of the southern European countries they even had to
contend with a slump in sales. This resulted in underperformance of the share prices of companies that have
considerable business in Europe vis-à-vis the general trend in the market. These equities also included LEONI’s
share: while our share price posted an encouraging year-on-year gain of about 11 percent to € 28.55, it was
thus up by less than either the overall market or the automotive sector. The high was reached in early April at
€ 40.21, while the low of € 23.42 was registered in mid November.
The market capitalisation of the roughly 32.7 million LEONI shares stood at about € 933 million on 31 December 2012, as opposed to approx. € 841 million one year earlier.
Trading volumes
A total of 72.3 million LEONI shares changed hands on the Frankfurt Stock Exchange and in the XETRA electronic trading system in 2012, down from 88.4 million in 2011. On average, 284,545 shares changed hands on
each trading day (previous year: 343,845). In euros, the value of LEONI shares traded in 2012 came to
€ 2,307 million. LEONI therefore assumed 17th place in Deutsche Börse’s MDAX ranking, down from 16th in the
previous year.
Company information
43
44
Shareholder structure stable
About 70 percent of the approximately 32.7 million LEONI shares were held by institutional investors on
31 December 2012. Private investors accounted for about 30 percent of the total. The largest shareholders with
holdings of between three and five percent at yearend were Wilms Beteiligungs GmbH and Oslo-based Norges
Bank. No single shareholder owned more than 5 percent of the shares.
The majority of LEONI shareholders are based in Germany, where about two thirds of the shares are held.
The remainder is evenly distributed across the rest of Europe and the United States.
In fiscal 2012, LEONI AG received the following voting rights disclosures pursuant to Section 21 (1) of the German Securities Trading Act (WpHG):
Voting rights disclosures in the 2012 financial year
Disclosure date
Party required to disclose
Current share
Above / below threshold (voting rights)
11 May 2012
Norges Bank, Oslo, Norway
below 3 percent
2.65 percent (866,812)
31 May 2012
Skandinaviska Enskilda Banken AG (publ), Stockholm, Sweden
above 3 percent
4.85 percent (1,585,378)
31 May 2012
Skandinaviska Enskilda Banken AG (publ), Stockholm, Sweden
below 3 percent
0.02 percent (6,300)
31 May 2012
SEB AG, Frankfurt am Main, Germany
above 3 percent
4.83 percent (1,579,078)
31 May 2012
SEB AG, Frankfurt am Main, Germany
below 3 percent
0.0 percent (0)
4 June 2012
above 3 percent
3.07 percent (1,001,812)
26 June 2012
Allianz Global Investors Kapitalanlagegesellschaft mbH,
Frankfurt, Germany
below 3 percent
2.73 percent (890.293)
31 July 2012
below 3 percent
2.73 percent (890,293)
15 August 2012
above 3 percent
3.002 percent (980,689)
These disclosures are also accessible on the internet at www.leoni.com under Investor Relations / Share /
Shareholder structure.
Stable dividend
LEONI AG pursues an earnings-oriented growth strategy, with shareholders receiving a commensurate return:
in principle, LEONI pays out about one third of consolidated net income in dividends. Based on our once
again positive earnings and financial situation, the Management Board and Supervisory Board will propose to
shareholders at the Annual General Meeting on 30 April 2013 to again pay a dividend of € 1.50 per LEONI share
for fiscal 2012. The payout would thus amount to an unchanged figure of € 49.0 million.
Dividend development
1.50
€
0.20
0.00
0.70
1.50
1.50 1
2008
2009
2010
2011
2012
1.00
0.50
0.00
1
Dividend yield development1
6.0
%
1.5
0.0
2.1
5.8
5.3
2008
2009
2010
2011
2012
2
4.0
2.0
0.0
1
2
based on yearend closing price
Company information
45
46
Investors like LEONI’s share
The LEONI share enjoys very good standing on the financial market. As at yearend, 24 banks and investment
firms regularly monitored our Company. Our share was therefore covered by three more institutions than one
year before, with coverage thus at a high level.
Analyst coverage LEONI share end of 2012
Bankhaus Lampe
Independent Research
Berenberg Bank
Kepler Capital Markets
Cheuvreux
Landesbank Baden-Württemberg
Close Brothers Seydler
LFG Kronos
Commerzbank
Macquarie
Deutsche Bank
MainFirst
DZ Bank
Metzler
equinet
Montega
Exane BNP Paribas
Nord LB
Goldman Sachs
Silvia Quandt Research
Hamburger Sparkasse
Steubing
HSBC
Warburg Research
The majority of financial market analysts rated especially LEONI’s solid condition and its convincing, earningsoriented growth strategy favourably. At the end of December 2012, 21 investment professionals rated the
LEONI share as either a buy (11) or a hold (10), even though the underlying conditions for automotive suppliers
had generally become tougher. Three analysts issued a sell rating at that time.
Extensive investor relations work
We consider transparency and proactive communication to be core elements of good corporate governance.
We advise shareholders, financial market players, the media as well as the interested public comprehensively
and promptly on the Company’s current and projected performance. In this way we establish confidence
among shareholders and stakeholders, which contributes to good performance of our share over the medium
and long term.
One-on-one dialogue with analysts, investors, private shareholders as well as the financial and business
media has high priority at LEONI. All members of the Management Board are therefore closely involved in
investor relations work. In 2012, we presented LEONI AG’s strategy and prospects in the context of a total of
21 roadshows in and outside Germany, with discussions also taking place in Canada and Australia for the first
time. LEONI furthermore participated in six investor conferences with international attendance and conducted
many one-on-one discussions.
Company information
47
Numerous other measures complement the personal commitment of the members of the Management Board.
For instance, the Investor Relations team provides timely statements on all share-relevant information by
means of ad hoc announcements as well as other publications. These include above all annual and interim
reports as well as media releases. As a matter of course we accompany the release of LEONI’s quarterly figures
with conference calls for analysts, during which the key facts are discussed and members of the Management
Board answer questions of participants. Furthermore, a balance sheet press conference for business journalists
is held once a year. These events are simultaneously transmitted in full on the internet.
In addition, extensive data on our Company and the LEONI share can be accessed on our
website. Along
with fundamental information, this also includes current analyst recommendations and the applicable fiscal
calendar. The website furthermore facilitates viewing of presentations given during the balance sheet press
conference, the Analyst and Investor Meeting, the Annual General Meeting as well as conference calls.
www.leoni.com
49
65
79
90
100
Disclosures pursuant to Art. 315 (4)
of the German Commercial Code
107
109
109
Forecast
122
49
Company information
Business basis
LEONI is a leading provider of cables and cable systems for the automotive sector and other industries. The
Company’s range of products and services comprises wires and optical fibers, cables and cable systems as well
as related components and services. Our widespread, worldwide business is divided into two divisions: Wire
& Cable Solutions (WCS) develops, produces and assembles wires and strands, optical fibers, standard and
special cables, hybrid and optical cables as well as complete cable systems for a very wide variety of industrial
applications. The Wiring Systems Division (WSD) develops and produces cable harnesses, complete wiring
systems as well as related components for the global motor vehicle and supply industry.
Cable systems / Wiring systems
Cable harnesses
Power distributors and Connector systems
Copper cables
Wires & strands
Hybrid cables
Optical fibers
Optical cables
Development / Engineering
Services
LEONI‘s products and services portfolio
Connectors
The two divisions form a complementary value chain and work closely together in many areas. This provides
multifaceted synergies in know-how and processes and thus a crucial competitive edge. The close collaboration between the two divisions also facilitates synergies in purchasing, development, regional market
development and other corporate areas. In turn, our customers benefit from high levels of specialist expertise,
innovative power, quality and flexibility.
Organisational structure
The LEONI Group comprises LEONI AG and the two divisions. LEONI AG acts as the holding company, performing overarching tasks with its corporate functions. The structure of the two divisions is geared to their customer groups and markets, subdivided into various business groups, business units and business areas. We can
thereby respond quickly to the varying requirements of our customers. The detailed structure of the divisions
and organisational changes are described in the
Segment report.
Segment report
page 65, 71
Organisation of LEONI Group
Holding
Wiring Systems
Wire & Cable Solutions
You will find a detailed presentation of the Group’s structure on the inside of this Annual Report’s back cover.
50
Principal facilities and acquisitions
World map with the
principal facilities
back cover
At the end of 2012, LEONI was, with 86 subsidiaries and 92 production facilities in
32 countries, located in
Europe, Asia, America and North Africa. In particular the following transactions changed the scope of consolidation during the year under report:
At the beginning of January LEONI acquired the outstanding 50 percent of the shares in the former joint
venture Daekyeung T&G Co. Ltd., based in Busan. The South Korean wiring systems specialist, which was fully
consolidated for the first time in 2012, generated sales of € 120.5 million in the year under report, manufactures at four facilities in China and supplies both local and foreign carmakers that have bases in the area. The
company has meanwhile been merged into Seoul-based LEONI Wiring Systems Korea Inc.
In mid March we sold our subsidiary LEONI Studer Hard AG, based in Däniken, Switzerland, which operates
in the field of irradiation and sterilisation of medical products, drugs and packaging that does not fit into our
core business. LEONI kept the plant that is important to us, namely that for electron-beam crosslinking and
refining of cables, plastic pipes, foils and conductors. In 2011 the disposed area of business generated sales of
€ 8.4 million.
At the beginning of May LEONI acquired the development operations of FCT electronik GmbH in Munich in
the context of an asset deal. LEONI thereby gained an eleven-member team of specialists in plugs and connector systems to strengthen its Business Unit Connectivity.
Notes
page 158
Segment report
page 66, 71, 72
The
Notes and the
Segment reports contain further detail of the changes to the scope of consolidation.
Customers and markets
The LEONI Group’s customers principally include the car and commercial vehicle sector as well as its suppliers. In addition there are companies in a wide range of capital goods industries, medical and communications
technology, the infrastructure sector, fields involving renewable energy and major industrial projects as well
as the household and electrical appliance industry. The automotive industry, as the most significant customer
sector, accounted for 75 percent of LEONI’s total sales in 2012 (previous year: 71 percent). With sales to the five
largest customers LEONI generated business totalling about € 1.4 billion during the year under report (previous year: € 1.3 billion), which equates to about one third of consolidated sales.
Our Wiring Systems Division supplies the majority of the multinational carmakers, the commercial vehicle
industry as well as their suppliers. The customers of the Wire & Cable Solutions Division stem from all of the
aforementioned sectors. More detail of the key customer groups and markets as well as the competitive situa-
Segment report
page 65, 66, 71, 72
tion of the two divisions is comprised in the
Segment report.
In regional terms, the focal areas of our business are Europe, North America and Asia. At present, Europe is
LEONI’s most important sales region. China is of greatest significance as a growth market. LEONI is also generating strong gains in the other BRIC countries as well as in North America.
Group strategy
LEONI pursues an earnings-oriented strategy of sustained expansion that prioritises qualitative growth over
Company information
51
purely quantitative growth. Organic growth is targeted to take consolidated sales to about € 5 billion by
2016. In so doing we aim not only to grow more strongly than the respective market segments, but above all
also to disproportionately increase our profitability. Our targets are a 7 percent EBIT margin and an ROCE at a
sustained 20 percent.
In addition to our core business involving cables and cable systems, we constantly examine options for extending our value chain. To do so, we build development know-how and our own production capacity in fields
that are closely related to our core business in terms of technology and application.
Our expansion is mostly organic. The objective with respect to sector orientation is to generate up to
Strategic levers
The implementation of the strategy we introduced in early 2012 follows the four levers of globalisation, innovation, system business and efficiency.
Overview of Group strategy
Efficiency
System business
Innovation
Globalisation
LEONI strategic pillars
LEONI Group
To take the globalisation of its business further forward, LEONI is setting up not only sales offices, but increasingly also production facilities in key markets. This enables us to offer customers based in these locations local
value creation and a high level of delivery flexibility. The focal area of growth will be the BRIC countries including South Korea. The target is to increase sales in these countries to about € 1 billion by 2016.
To strengthen our power of innovation, we are enhancing and improving our own expertise as well as
technologies and our position in innovation-driven growth markets. In so doing we are geared primarily to the
global megatrends, such as the growing demand for environmentally friendly technologies. The intention is to
further increase sales of new types of products and solutions, and to make LEONI the leading and most innovative manufacturer of cables for green technologies.
40 percent of our total business outside the automotive sector over the medium term.
52
LEONI rates the system business and extension of the value chain as key growth drivers. That is why we intend
to develop towards being system supplier to additional markets and to offer more high-end services in such
areas as engineering. The objective is to further increase the profitable sales in this business. Both divisions are
expected to make material contributions in this respect; among others, in the electromobility, solar, medical
technology, component and connector businesses.
Efficiency constitutes a key success criterion for LEONI’s competitiveness. We are raising this by realising
synergies, rationalising as well as optimising our business processes and production networks. These measures are intended to achieve annual efficiency gains and thereby to offset increases in staff and material costs.
The two divisions have set themselves individual, strategic targets for the four levers. They are tailored
Segment report
page 66, 72
to the particular requirements of their respective markets and customers. The
Financial situation
page 82
of the Group-wide funding strategy are contained in the section on the
Segment report provides
specific information on the organisation of and progress in implementing the strategy in the divisions. Details
Financial situation. LEONI does not
have any strategic equity interests.
Geared to global trends
We monitor and assess global trends in order to continuously review our long-term alignment and to develop
new fields of business. The chart below illustrates the dynamics and demand drivers that are currently of
importance to us. It also shows how LEONI is taking targeted advantage of the resulting growth opportunities
in the most significant markets.
LEONI Strategy – Global trends
Demand drivers
Global trends
LEONI’s
response
Demographic change
Urbanisation
Globalisation
Environmental awareness &
shortage of resources
Industrialisation & Automation
Mobility
Examples of growth areas
Health care
Power generation and efficiency
Safety
Environment and climate protection
Communication
Electromobility
Allocation of innovative topics
Development of new areas
Strengthening system competences
Range expansion of services offered
Automotive & Commercial Vehicles
Industry & Healthcare
Communication & Infrastructure
Electrical Appliances
Conductors & Copper Solutions
Company information
53
Corporate governance and management system
LEONI’s corporate governance is geared to the principles of the German Corporate Governance Code. The
Management Board is responsible for corporate governance. Its work is monitored by the Supervisory Board.
The Management Board also determines Group strategy and, together with those in charge of the divisions
and the individual business units, measures suited to strategy implementation.
The operating units are governed by the key figures of sales, earnings before interest and taxes (EBIT) and
capital employed as well as free cash flow. We measure the respective target attainment by the benchmarks of
Return on Sales (EBIT margin) and Return on Capital Employed (ROCE). Information on how ROCE is determined and on capital management is to be found in the
Notes.
Notes
page 195, 201
Performance indicators LEONI Group
Planned 2012 figures
Actual 2012 figures
Consolidated sales
€ billion
3.8 up to 4.0
3.81
EBIT
€ million
230 up to 280
235.8
Return on sales
%
6 up to 7
6.2
%
> 20
20.8
€ million
50 up to 80
63.5
Free cash flow *
* before acquisitions / divestment
The table below shows the planned and actual figures involving the key benchmarks for 2012.
54
Compensation report
This compensation report follows the recommendations of the German Corporate Governance Code (Code)
and contains disclosures that, according to the requirements of the German Commercial Code (HGB) and the
International Financial Reporting Standards (IFRS), are part of the Notes as well as of the Management Report.
Compensation of the Management Board
The compensation structure for the Management Board, which has applied since 1 January 2010, is based on
the Act on the Appropriateness of Management Board Compensation (VorstAG), which came into force on
5 August 2009 and is also contained in the recommendations of the current German Corporate Governance
Code. The Supervisory Board reviews the compensation system at least once a year. The most recent review
was carried out during the meeting of 5 December 2012, when the medium-term planning and its effect on
future Management Board compensation was also discussed and included in the review.
Basic principles of the compensation system
In accordance with the Code, we hereinafter explain the principles of the system for compensating the
members of LEONI AG’s Management Board and the specific structure of the individual components. The table
below provides an overview of the structure and system for Management Board compensation:
Component
Measurement basis
Corridor
Precondition for payment
Payment
1. Fixed compensation
Fixed salary
Benefits in kind/
Fringe benefits
Function, responsibility,
duration of Board membership,
standard
Firmly agreed
for the term of the contract
Contractual stipulation
Monthly
2. Short-term compensation Task, performance,
component
consolidated net income
Annual bonus
0 to 150 %
[ Target fully met = 100 % ]
1-year planning,
target attainment
Once a year
in the subsequent year
3. Medium-term compensation component
Multi-year bonus
0 to 150 %
[ Target fully met = 100 % ]
3-year planning,
target attainment on a 3-year
average at least 50 %
In the 4th year
4. Long-term compensation Task, performance,
component
EVA and share appreciation
Bonus account
0 up to cap,
penalty rule
Contractual stipulation
Once a year
in the subsequent year
50 % of which converted into
LEONI shares with a 50-month
holding period
5. Disability and other
benefits
Accrued pension rights
Fixed amount
Retirement,
disability
—
Task, performance,
consolidated net income
Pensionable fixed salary,
years of service on the Board
Fixed compensation
The fixed component is a firm, annual amount of basic compensation that is paid in equal monthly instalments. It is adequate in comparison with the compensation of other MDAX companies.
Variable components
Short-term compensation component – annual bonus: An annual bonus is paid depending on the net income
Company information
55
generated. It is capped at a maximum of the figure that can be attained by 150 percent plan fulfilment. The
annual bonus can drop to nil. This conforms to the requirements of both the VorstAG and Code.
Medium-term compensation component – multi-year bonus: The multi-year bonus is geared to the net
income of the year in question measured against the earnings of a three-year period and thus conforms to the
sustainability requirement set out in both the VorstAG and Code. The multi-year bonus is limited by a corridor
(0 to 150 percent). Payment is made after the three-year period and only if the (arithmetic) average degree of
target attainment for the three-year period is at least 50 percent. Otherwise the multi-year bonus is forfeited in
instalment.
Long-term compensation component: A long-term compensation component that takes adequate account of
the economic value added (EVA) and the Company’s market capitalisation is intended to further strengthen
sustained, positive business performance. An amount is paid out annually from this bonus account up to a cap,
50 percent of which members of the Management Board must invest in LEONI shares, which must be retained
for a period of 50 months, thereby conforming to the 48-month minimum holding period prescribed by the
VorstAG. This compensation component can drop to nil. Negative business performance will reduce the bonus
account (penalty rule), which can drop to nil.
The total compensation is adequate in comparison with that paid by other MDAX companies and other
companies of similar size. It takes account of both good and poor performance. Furthermore, the individual
compensation components do not tempt the Management Board to take inappropriate risks. An internationally recognised compensation expert oversaw the preparation of the compensation structure and confirmed
its conformity with the legislation including the Code. The Supervisory Board assured itself of the compensation expert’s independence. In summary, it may be concluded that compensation for the members of LEONI’s
Management Board meets the requirements of both the VorstAG and Code and is set up for sustainability.
Disability and other benefits
In the event of temporary work incapacity due to illness or other reasons, for which the Management Board
member is not responsible, the fixed compensation will continue to be paid for a period of up to twelve
months, at most up to termination of the employment contract. In the event of permanent work incapacity
the Management Board member will receive a disability pension. If a Management Board member dies, the
widows and orphaned children will be paid pensions. Following the end of their 65th (or 63rd with agreed discounts) year of age, every Management Board member is entitled to payment of retirement benefits, which are
computed according to the period of Management Board service and the pensionable fixed salary. Pensionable is defined as a contractually agreed proportion of the final fixed salary. The disability and other benefits
granted to members of LEONI AG’s Management Board are also adequate in comparison with those of other
MDAX companies.
full. It is paid in the fourth year, while 50 percent of the amount is paid in the respective subsequent year as an
56
Other
Severance payments upon premature termination of Management Board duties in the absence of a material
reason are limited to two years’ compensation and shall not be more than the annual compensation for the
balance of the employment contract (severance cap pursuant to the Code).
In the event of a change of control, every Management Board member has the right to terminate for material reason and shall be entitled to severance payment. Such payment is limited to a maximum of three years’
compensation (150 percent of the severance cap pursuant to the Code) and shall even in this event not exceed
the annual compensation for the balance of the employment contract.
Cost of compensation in 2012
The tables below provide individualised presentation of the cost of compensating members of the Management Board in the 2012 financial year and, in comparison, the corresponding figures from fiscal 2011. Table 1
shows the cost of compensation and pensions recognised in the LEONI Group’s income statement. Table 2
provides information on the actual payments.
Individualised presentation of the cost of compensating Management Board members for the respective financial year:
Compensation
Table 1
in € ‘000
Pensions
Fixed
compensation
Short-term
compensation
component
Long-term
compensation
component
Long-term
compensation
component
Other
Total
Annual benefit
once pension
entitlement
takes effect
Addition to
pension
provision in
the fiscal year
460
31
3,425
2021
180
Dr K. Probst
2012
750
1,560
624
2011
750
1,500
293
395
31
2,969
297
188
D. Bellé
2012
575
1,045
421
296
39
2,376
188
155
2011
550
1,005
198
256
38
2,047
188
164
U. Lamann
2012
575
1,045
421
12
26
2,079
188
250
2011
550
1,005
198
256
27
2,036
188
257
Dr A. Brand
2012
75
135
0
0
8
218
0
0
Total
2012
1,975
3,785
1,466
768
104
8,098
578
585
Total
2011
1,850
3,510
689
907
96
7,052
673
609
Other
Total
1
The reduction in annual benefit by € 95 k versus 2011 is due to the lowering of pension benefits in the context of pension rights adjustment.
Individualised presentation of the amounts paid to Management Board members for the respective financial year:
Payment
Table 2
Fixed
compensation
in € ‘000
Dr K. Probst
D. Bellé
U. Lamann
Short-term
compensation component
Medium-term
Long-term
2012
750
1,560
831
400
31
3,572
2011
750
1,500
147 1
350
31
2,778
2012
575
1,045
560.5
267
39
2,486.5
2011
550
1,005
99 1
233
38
1,925
2012
575
1,045
560.5
267
26
2,473.5
2011
550
1,005
99 1
233
27
1,914
Dr A. Brand
2012
75
135
0
0
8
218
Total
2012
1,975
3,785
1,952
934
104
8,750
Total
2011
1,850
3,510
345
816
96
6,617
1
Medium-term compensation component initially by instalment as per contract
1
The cost of compensation for the members of the Management Board for fiscal 2012 totalled € 8,098 k (previous year: € 7,052 k). Of this, the Management Board members were paid € 8,750 k for 2012 (previous year:
€ 6,617 k).
Company information
57
Other compensation comprises the non-monetary benefits in the use of company cars and top-ups on insurance policies. Also shown are the pension entitlements pertaining to each member of the Management Board
as well as the addition to pension provisions in fiscal 2012. This in principle comprises service costs and past
service costs. Pensions are paid to Management Board members who have either reached the retirement age
of 63 years or are permanently disabled. The pension entitlement of the active Management Board members
is computed as an agreed pensionable proportion of the final fixed annual salary. Previous Management Board
members were paid retirement benefits from their 65th year of age.
The compensation for members of the Supervisory Board, which is stipulated in the Articles of Association,
currently contains a fixed and a performance-related component. The fixed amount is € 45 k. The deputy
chairpersons receive one and a half times and the chairperson receives double this amount. The performancerelated component is a maximum 50 percent of total compensation. It corresponds to 4 percent of the amount
by which the amount of the distributable profit exceeds 4 percent of the Company’s share capital. The variable
compensation must be divided among the members of the Supervisory Board at the same ratio as the basic
compensation. The compensation for committee work comes to € 8 k per ordinary member. It is paid only if
the committee meets at least once in the year. The total cost of committee work (Personnel, Audit and Nomination committees) for all committee members is capped at € 116 k. In total, including committee work, the
maximum compensation for Supervisory Board members amounts to € 1,376 k.
Compensation system for the Supervisory Board
1. Fixed compensation
Ordinary member
Deputy chair (factor)
Chair (factor)
Total*
2. Variable compensation
as a percentage of total compensation
maximum
3. Committee work
maximum
4. Total compensation
maximum*
* based on 2nd deputy Supervisory Board chairpersons
2012
€ 45 k
x 1.5
x2
€ 630 k
0 to 50 %
€ 630 k
€ 116 k
€ 1,376 k
Supervisory Board compensation
58
The compensation for members of the Supervisory Board in 2012 and 2011 broke down as follows:
in € ‘000
Other
Total
2012
130
90
—
220
2011
130
90
—
220
Franz Spieß 2)
2012
84
68
—
151
2011
84
68
—
151
Ernst Thoma 3)
2012
34
25
—
59
2011
100
68
—
167
Gabriele Bauer
2012
50
45
—
95
2011
45
45
—
90
Josef Häring
2012
45
45
—
90
90
Ralf Huber 5)
Karl-Heinz Lach
Dr Werner Lang
Chairman of the
Supervisory Board
1st Deputy Chairman of the
Supervisory Board
3) nd
2 Deputy Chairman of the
Supervisory Board until
16 May 2012
4)
Member of the Supervisory
Board from 12 May 2011
5)
Board until 16. May 2012
6)
Board from 16 May 2012
7)
Board until 12 May 2011
8) nd
2 Deputy Chairman of the
Supervisory Board from
16 May 2012
9)
Addition of the individual
payments in € thousands
may deviate from the
reported totals due to
rounding.
2)
Performance-related
compensation (net)
Dr Werner Rupp 1)
Ingrid Hofmann 4)
1)
Fixed compensation
(net)
6)
Richard Paglia 6)
Dr Bernd Rödl
Horst Schmidmer
7)
Wilhelm Wessels
Helmut Wirtz
Prof. Dr-Ing. Klaus Wucherer
Total
9)
8)
2011
45
45
—
2012
45
45
—
90
2011
29
29
—
57
2012
20
17
—
37
98
2011
53
45
—
2012
45
45
—
90
2011
45
45
—
90
2012
28
28
—
56
0
2011
0
0
—
2012
33
28
—
61
2011
0
0
—
0
2012
60
45
—
105
2011
45
45
—
90
2012
0
0
—
0
2011
16
16
—
33
2012
45
45
—
90
2011
45
45
—
90
2012
45
45
—
90
2011
45
45
—
90
131
2012
72
59
—
2011
53
45
—
98
2012
736
630
—
1,366
2011
734
630
—
1,364
Company information
59
Planned revision of Supervisory Board compensation
The amended version of the German Corporate Governance Code that has been in effect since 16 June 2012
recommends that any performance-related compensation paid to Supervisory Board members shall be geared
to sustained business growth. The Supervisory Board of LEONI AG thereupon reviewed its compensation
with the help of an outside expert on compensation. Even though the Code does not define with sufficient
clarity the conditions under which the characteristic of sustainability in a variable compensation component
is fulfilled, the Supervisory Board nevertheless found that gearing of its variable compensation component
to sustained business growth is currently not assured. To remove this uncertainty, the Nomination Committee was assigned the task of working out a new system. This would involve complete removal of the variable
compensation component and a system of fixed compensation only. This would provide for a fixed amount
of € 85 k, which under the currently applicable system would equate to the sum of the hitherto fixed amount
plus variable compensation of € 40 k. The latter amount would thus be about 11 percent below the hitherto
maximum possible variable compensation of € 45 k. The existing multipliers for the chair (x 2) and deputy chair
(x 1.5) would remain unchanged and also be applied to this new fixed amount. The existing compensation for
committee work is also to remain unchanged. Based on the increase in time spent and the greater responsibility involved in Supervisory Board and committee work, the Supervisory Board also proposes to introduce
attendance money of € 1,000 per meeting and Supervisory Board member. However, this attendance money
would only be paid for participation in meetings of the Supervisory Board and the Audit Committee; furthermore, no more than a total of ten meetings per financial year are to be taken into consideration.
The maximum overall compensation possible for Supervisory Board members in the future will thus, including committee work and attendance money, come to € 1,422 k, representing a maximum increase of just
3.64 percent that is deemed to be within reason.
Any change to the Supervisory Board compensation system requires an amendment to the Articles of Association, which can only be adopted by shareholders at the Annual General Meeting. The Supervisory Board
approved this proposal for revision of its compensation system during its meeting on 5 December 2012 and
decided to present it for resolution at the Annual General Meeting on 30 April 2013. Given its adoption at the
Annual General Meeting, the new system would take retroactive effect on 1 January 2013.
Economic, political and legal factors
One of the key external factors that influence LEONI’s business performance is the economic trend on its most
important markets. This is described in detail in the section on
The prices of
Business and underlying conditions.
commodities, especially of copper, likewise play an important role for LEONI. We largely
pass the fluctuations in the price of copper on to our customers based on contractual agreements to this effect, albeit normally after a time lag. A rising price of copper will thus normally result in growth of LEONI’s sales
without any corresponding, perceptible effect on earnings.
Group-wide, the trend in energy prices does not have any major impact on LEONI. The substantially increased energy costs especially in Germany did, however, impose a burden on domestic production facilities
in 2012.
Business and
underlying conditions
page 60
Procurement
page 90
60
Another significant factor involves personnel costs in the countries where we produce. They are considered
in our decisions on choices of location, as are reliable legal and political conditions as well as favourable transport options. In 2012 wage costs increased significantly in North Africa as well as China and moderately so in
Eastern Europe.
We continue to watch the unstable political situation in Egypt and Tunisia very closely. It has so far not had
any notable effect on LEONI. Like our customers, we still consider the conditions for production in North Africa
to be competitive and will keep our capacity accordingly.
Alongside the respective national legislation of the countries, the legal factors that affect LEONI also
include international laws. The stricter CO2 emission limits for cars in Europe, for example, exert indirect influence. They are raising demand from the automotive industry for cables, cable harnesses and wiring systems
that are especially lightweight or suited to alternative drive technologies.
Notes
page 193
Thanks to appropriate hedging transactions,
exchange-rate fluctuation does not have any major impact
on LEONI’s performance. The euro’s persisting weakness is likely, however, to have improved the worldwide
sales opportunities of our European customers.
Leading operational indicators
LEONI monitors various leading operational indicators to be able to identify the direction of external factors
at an early stage and to take this into account in its corporate governance. Key indications of future business
Business and underlying
conditions
page 60
prospects are gained from
analysis of suitable market, economic and sector data. To assess the situation in
the worldwide motor vehicle industry we refer, for example, to global and regional economic forecasts as well
as to the sales and output figures projected by the sector associations. We obtain supplementary information
from the annual and quarterly forecasts of our customers as well as direct conversations with market partici-
Segment report
page 70, 75
Procurement
page 90
pants. Other significant leading indicators involve the
to the likely degree of capacity utilisation, as well as the
order receipts in our business divisions, which point
trend in the prices for important commodities,
especially for copper, which provides findings concerning the direction of significant cost items.
Macroeconomic trend
The global economy continued to lose momentum in 2012. According to the IMF (International Monetary
Fund), global growth came to about 3.2 percent, down from 3.9 percent in the previous year. Key reasons
included the sovereign debt crisis in the eurozone, the resolving of which did not show any notable progress
until the second half of the year, and the US economy that was subdued a good deal of the time. These factors
also increasingly affected the previously strong momentum in the emerging and developing countries, which
still grew by about 5.1 percent overall according to the IMF. In 2011 the growth for these countries was
6.3 percent. The in any case already modest pace of growth in the industrialised countries dropped further,
from 1.6 percent to 1.3 percent, against the backdrop of the generally tough underlying conditions. Performance was especially weak in the eurozone, whose economic output even contracted by 0.4 percent in 2012.
Company information
61
World economic growth 2010 – 2012
5.2 %
2010
2011
3.9 %
2012
3.2 %
Economic growth 2012 in selected regions
USA
2.3 %
Brazil
1.0 %
Eurozone
(0.4) %
Russia
3.6 %
Japan
2.0 %
China
7.8 %
India
4.5 %
Source: IMF World Economic Outlook (1/2013)
By contrast, the German economy proved to be resilient and bucked the European recession. The German Federal Office of Statistics puts 2012 growth in gross domestic product at 0.7 percent. The factors contributing to
this were above all very good exports and increased consumer spending. In the wake of the subdued trend in
the global economy and the crisis of confidence in the eurozone, however, the German economy also slowed
down significantly towards yearend.
Business by sector
The more difficult macroeconomic conditions also left their traces on the markets in which LEONI operates.
The automotive sector, which is especially important to us, faced a sharp decline in registration figures –
especially in Europe – of nearly 8 percent, according to German Association of the Automotive Industry (VDA).
There were heavy decreases particularly in southern European countries. Volume business slumped considerably in this region during the fourth quarter. Unlike in the 2008/2009 crisis, the automotive industry was quick
to adjust its output to this situation and thus avoided large inventories.
In contrast, demand in North America and the emerging countries proved to be encouragingly robust with
significant gains in the premium segment. The VDA says that sales in the United States were up by more than
13 percent; in India by over 10 percent and in China by about 8 percent. The good sales in these regions were
reflected in the generally higher output figures: the IHS Global Insight market research institute says that
worldwide output was up by about 6 percent in 2012, to approximately 81.5 million cars.
Source: IMF World Economic Outlook (1/2013)
62
Production of cars and light commercial vehicles (LCVs) by regions
2011
2012 million units
20.1
19.2
Europe
2.2
1.7
Middle East /
Africa
North America
13.1
15.4
Latin America
4.3
4.3
37.0
40.9
Asia
Source: IHS Global Insight (2/2013)
Production of cars and LCVs by region 2012
Middle East / Africa 2 %
Latin America 5 %
North America 19 %
Asia 50 %
Europe 24 %
Demand for commercial vehicles fell short of the original projections in 2012 due to the economic slowdown.
Along with the European market, this affected China and South America among other markets. IHS estimates
indicate that, against this backdrop, global production of commercial vehicles was down by 7 percent to
3.2 million units.
Commercial vehicles production in selected regions
2011
2012 million units
Europe
0.6
0.5
North America
0.4
0.4
Latin America
0.3
0.2
Asia
2.2
2.0
The German electrical goods industry also lost a significant amount of momentum in the course of 2012
because of the fallout from the euro debt crisis and the slowdown in the global economy. According to the
German Electrical and Electronic Manufacturers’ Association (ZVEI), the sector’s sales dipped by nearly
3 percent to € 173 billion. Output also dropped by about 3 percent. Order receipts were even down by about
9 percent, with approximately 14 percent fewer orders coming from the domestic market. The decline in
orders from export markets remained moderate at about 3 percent.
The machinery and plant engineering sector, on the other hand, looks back on a good year. The German
Engineering Federation (VDMA) says that, thanks to the large order backlog at the turn of the year and successful export business, the industry increased its output by about another 2 percent in 2012. The sector’s sales
Company information
63
increased by nearly 4 percent to the record level of about € 209 billion. However, with a 3 percent drop over
the year as a whole, order receipts were below the 2011 level. Orders from outside Germany meanwhile held
steady. Domestic demand diminished by 8 percent.
After better than expected business performance, the German Association for Information Technology,
Telecommunications and New Media (BITKOM) raised its projection for the German ICT market significantly
in the course of the year: the sector’s sales are likely to have increased by 2.8 percent to € 152 billion in 2012.
Numerous innovations provided a tailwind. Thanks for instance to booming smartphone sales, the telecommunications segment generated a strong, 3.4 percent increase in sales. In the information technology segment
and software products. The consumer electronics segment performed better than originally forecast with an
increase of 2.3 percent. Here there was strong demand above all for TV sets.
In the cable industry, last year’s takeover by the power and telecommunications cable manufacturer Prysmian of the cable manufacturer Draka with its worldwide operations resulted in the expected slight consolidation of the market, but did not have any noteworthy effect on LEONI. The trend towards the use of alternative
conductor materials and to reducing cable cross-sections continued in our markets. LEONI commands a leading position in this respect, in both development and industrial application.
Overview of LEONI’s performance /
General statement on the economic situation
Group key figures
2012
2011
Change
Consolidated sales
€ million
3,809.0
3,701.5
+ 2.9 %
EBIT
€ million
235.8
237.1
(0.5) %
€ million
225.4
260.3
(13.4) %
%
6.2
6.4
—
Consolidated net income
€ million
156.0
156.0
0.0 %
Free cash flow 2
€ million
63.5
121.2
(47.6) %
Adjusted EBIT
1
EBIT margin
%
20.8
24.0
—
Capital expenditure on property, plant and equipment
as well as intangible assets
€ million
154.2
137.4
+ 12.2 %
Acquisitions and financial investments
€ million
26.7
2.7
+ 888.9 %
Employees (as at 31 December)
Number
59,393
60,745
(2.2) %
1
Earnings adjusted for the impact of revaluation as part of allocating the prices of the major acquisitions, restructuring, impairment of non-current assets,
capital gains on the disposal of businesses and income from business combinations including related derivatives
² Free cash flow before acquisitions and divestments
the amount of business was up by 2.3 percent thanks to the strong demand for modern tablet computers
64
LEONI boosted its consolidated sales in fiscal 2012 by about 3 percent versus the previous year to € 3.81
billion, and thus posted a new high. The strong demand in most of our customer industries from Asia and the
Americas formed the basis of this performance. This applied especially to the automotive industry, where surprisingly strong sales of premium cars in China and the United States offset the declining business of volume
manufacturers in Southern Europe.
The sales growth was due above all to the takeover in full of the former joint venture partner Daekyeung
(LEONI Wiring Systems Korea), which made a key contribution to the increase in the Wiring Systems Division’s
external sales of 9 percent to € 2.21 billion. The Wire & Cable Solutions Division recorded, at a slightly lower
copper price and under difficult conditions in its still mostly Europe-focused business segments, external sales
of € 1.60 billion after € 1.68 billion in the very strong previous year.
The LEONI Group’s 2012 earnings before interest and taxes (EBIT) amounted to € 235.8 million and thus
almost matched the previous year’s record level. This included a positive exceptional item from the disposal
of the operations of LEONI Studer Hard AG, which did not fit into our core business, in the amount of
€ 28.3 million. This lifted the EBIT of the Wire & Cable Solutions Division to € 101.3 million (previous year:
€ 90.3 million). The Wiring Systems Division had to absorb an adverse effect on earnings from our Korean subsidiary, which was attributable to the high integration costs and weaker operating performance. In addition
there were significantly increased restructuring expenses, which were incurred by concentrating the wiring
systems production in Tunisia and closing a former Daekyeung facility in China. The Wiring Systems Division’s
EBIT consequently dropped from € 146.2 million to € 134.5 million. With respect to consolidated net income,
we succeeded in matching the previous year’s figure of € 156.0 million.
Corporate governance
and management
system
page 53
Fiscal-2012 consolidated sales remained within the
range of € 3.8 to 4 billion projected at the beginning of
the year and slightly exceeded the forecast of € 3.75 billion as revised in the autumn because of the weakening
economy. Consolidated earnings before interest and taxes also came in at the lower end of the € 230 to
280 million range forecast at the beginning of the year, but this did not yet take account of the proceeds
from the Studer Hard AG sale. The forecast as revised in the autumn was also slightly exceeded with about
€ 236 million.
The LEONI Group further strengthened its financial and asset situation in 2012. Free cash flow amounted to
€ 63.5 million and was thus within the projected range. The equity ratio of 34.5 percent and the net financial
liabilities of € 249.2 million were both better than originally anticipated. The successful placement of a borrower’s note loan also secured the refinancing due in 2013 before term.
Against the backdrop of the difficult economic setting in Europe, the Management Board on the whole rates
the 2012 financial year as positive and as the second best year in the Company’s history. Alongside the new
sales record and the repeatedly very good level of earnings, the further assured financial and asset situation is
especially encouraging.
Company information
65
Wiring Systems Division
Business model and organisational structure
The Wiring Systems Division (WSD) is Europe’s largest and one of the world’s leading providers of complete
wiring systems as well as customised cable harnesses for the motor vehicle industry. Its products and services
range from the development and production of sophisticated cable harnesses through to integrated wiring
systems, high-voltage wiring systems for hybrid and electric vehicles, power distribution components and
special connectors. As systems providers, we cover the entire spectrum from design through to series produc-
tion as well as complementary services.
Wiring systems (incl. high voltage cable harnesses)
Preformed cable harnesses
Power distribution components
Conventional cable harnesses
Plastic components
Extrusion-coated connectors
From the design concept
to the assembly/supply
Products and services Wiring Systems
The automotive industry is the most important customer group. With few exceptions, we supply all manufacturers and vehicle categories worldwide from the low-cost, entry-level model to the whole gamut of compact
and mid-range cars and up to vehicles in the premium and luxury segments. The makers of commercial
vehicles like trucks, agricultural and construction machinery as well as the leading, independent engine manufacturers are also of growing importance. The automotive component suppliers, which operate worldwide
and supply their systems complete with our cable harnesses to the vehicle manufacturers, constitute the third
key customer group. On their behalf LEONI develops and produces, for example, cable harnesses for heating,
ventilation and air-conditioning systems as well as for driver-assist systems such as vehicle-interval radar, ABS
and ESP. In 2012 we succeeded in gaining some new customers in this segment.
Our wiring systems and cable harnesses are developed in tandem with a new vehicle in close collaboration
with the customer. We therefore maintain very close, trusting relationships with our customers. The factors
forming the basis for this are LEONI’s major know-how in the development, manufacture and distribution of
wiring systems as well as our high quality and reliability.
The organisational structure of our Wiring Systems Division is also geared to the customer. A dedicated
subdivision (Business Unit/BU or Business Group/BG) with profit-centre responsibility is assigned to look after
each of the various carmakers, the commercial vehicle and the automotive supply industries. In addition there
are business units to cover the specialist segments of components and electromobility as well as the newin-2012
BU Connectivity.
2012 strategic projects
pages 67, 68
66
Organisation of the Wiring Systems Division
BMW Group
Fiat
as of October 2012
GM &
Components
Jaguar
Land Rover
MercedesBenz
Renault
Nissan
PSA
VW Group
Wiring Systems
Commercial
Vehicles
Suppliers
International
Electromobility
Connectivity
Components
Americas
Russia
Asia
The fact that we are geared to our customers ensures that each individual customer or any customer group
has one and the same contact worldwide. In sales the principal customers are looked after via a key account
management structure. Locally, furthermore, ‘residents’ will frequently deal with special concerns of the customer locations. In addition, there are corporate sales departments in Germany and France as well as sales and
development offices in China, India and the United States.
The worldwide production network of the Wiring Systems Division consists of 30 production facilities in 19
countries, above all in China, Mexico, North Africa and Eastern Europe. The locations are chosen strictly on the
basis of cost benefit and logistical requirements, and are situated as near to our customers as possible. This
page 67
production network was expanded in 2012 above all with a view to the
emerging markets in Russia, Brazil,
China and Mexico.
Competitive situation and advantages
During the year under report we succeeded in bolstering our leading position in the European market for
cable harnesses and wiring systems with a share of 23 percent. Based on our own research, the Wiring Systems
Division continues to rank 4th worldwide with a 9 percent share of the market. The most significant competitors are Delphi, Sumitomo and Yazaki.
The principal competitive advantages alongside market leadership in Europe are our great power of innovation and a high real net output ratio, strong logistics and systems expertise as well as development centres
spread worldwide with close proximity to the customer. Another particular strength involves our global production network with standardised processes as well as the fact that a high proportion of our production is at
locations with favourable wage costs. Our very broad international positioning as well as the large number of
vehicle manufacturers and brands supplied not only diminish the exposure to regional market cycles, but also
enable us to take advantage of growth opportunities worldwide.
Strategy
The Wiring Systems Division pursues an earnings-oriented growth strategy. The objective is to protect its market leadership in Europe and in the medium term to attain a double-digit share of the global market. Along the
Group strategy
pag 51
lines of the four strategic levers at the
corporate level, the division is focussed on the following:
Overview of Wiring Systems strategy
Levers
WSD definition
The division‘s objectives
Globalisation
Further success in
BRIC markets
Innovation
New and further development of products and
processes
System business
Extension
of the value chain
Efficiency
Safeguarding
of high cost efficiency
Company information
67
Broadening business with existing customers in Europe, NAFTA and Asia
as well as activity in the area of electromobility and gaining new customers
Extending market leadership in Europe and taking an above-share in the growth
in the above-mentioned regions
Expansion of production capacity for the new target markets
to have cost effective production close to the customer, to shorten delivery
distances and to minimise currency and customs problems
Networking of R & D development tools to optimise development cycles and costs
Integration of the value creation process from development
through to production, described as ‚design-to-build‘
Weight optimisation with alternative conductor materials
Optimisation of connection technology
Systematic analysis of wiring systems-related opportunities
for broadening scope and collaboration
Development of customised connectors and power distributor
components for both high and low voltages
Focus on best-cost locations and multi-layered networking of production facilities
Best-in-class supply chain management and high-quality, faultless production
Ongoing optimisation of the production factors used by way of an improvement
cycle embedded in our corporate culture
Based on these four levers, the division embarked on and implemented various strategic projects during the
year under report:
Globalisation focussed on emerging markets
In 2012 we set up and expanded several facilities to improve our position in the emerging markets. In Russia
the division relocated its operations in the automotive region of Nizhny Novgorod east of Moscow into a new,
larger production facility to have ample capacity for its fast growing business. For our plant in Itú, Brazil, which
has in recent years supplied products exclusively for commercial vehicles, we obtained a larger-scale contract
from the car industry and expanded our local capacity for series production of passenger car wiring systems.
68
The facility in Durango, Mexico, which supplies the North American market, was also enlarged to handle new
contracts. In China we prepared for a new production facility in Langfang near capital city Beijing, which will
probably execute its first projects in 2014. For the first time we also set up development resources in Japan to
establish contact with the country’s automotive industry.
Business in Asia strengthened by acquisition in full of Daekyeung
In order to better develop the South Korean automotive market and to rapidly expand its position in Asia,
LEONI in early 2012 acquired the outstanding 50 percent equity in the former joint venture partner DaekyeNotes
page 158
ung T&G Co. Ltd. of Busan, and merged the company with
LEONI Wiring Systems Korea Inc. LEONI acquired
the initial 50 percent equity in the South Korean wiring systems specialist, which supplies local and foreign
customers from its Chinese production sites, back in May 2008. The complete takeover gave sales in Asia a
significant boost.
During the year under report, the Daekyeung production facilities were integrated into the LEONI production network and a new plant was commissioned in Jining, which took over the operations from the meanwhile closed plant in Weihai. This initially incurred major integration, start-up and restructuring costs that
weighed on earnings. In addition there was weaker demand for the vehicles for which LEONI Wiring Systems
Korea supplies products as well as adverse effects relating to the product mix. We adjusted capacity to the
reduced demand. Our target for the company in 2013 is a break-even operating result.
Innovations: automation driven forward
LEONI commissioned its first automated line for the production of dashboard cable harnesses in 2012 at its
facility in Bistrita, Romania. We thereby reached a key milestone in rationalising what was until then mostly
manual production of wiring systems, which should in the medium term lead to significant efficiency enhance-
Research & Development
page 97
ments. The section on
Research & Development provides information on the key product innovations.
Systems expertise enhanced by new BU Connectivity
In May 2012 we set up our Business Unit Connectivity with the aim of targeted expansion of our value chain
Notes
page 160
to include plug and connector systems in the low and high voltage segments. For this reason we
took over
a team of specialists as well as some of the assets of our long-standing partner FCT electronic GmbH, based
in Munich. The Wiring Systems Division thereby boosted its product development know-how and can now
optimise connector systems for the specific requirements of our wiring systems and provide the customer with
even more efficient products. We also extended our systems expertise in the segment comprising compo-
page 97
nents for vehicles with electric drive. Information in this respect is to be found in the section on
Research &
Development.
Great cost efficiency thanks to an optimised production network
The Wiring Systems Division continually develops its production network to ensure its competitive cost
structures. In 2012 a plant in Tunisia was closed and wiring systems production in this region was concentrated
down from four to three locations. In Poland the division prepared to close a facility, and in Paraguay we
started to investigate options for setting up a low-cost facility. We also achieved efficiency progress by standardising development software and optimising the interface between development and production.
Company information
69
Business performance 2012
Key figures Wiring Systems
2012
2011
Change
External sales
€ million
2,206.4
2,023.8
+ 9.0 %
EBIT
€ million
134.5
146.2
(8.0) %
Adjusted EBIT 1
€ million
150.2
165.4
(9.1) %
%
6.1
7.2
—
EBIT margin
€ million
98.7
76.3
+ 29.4 %
number
51,089
52,643
(3.0) %
Earnings adjusted for the impact of revaluation as part of allocating the prices of the major acquisitions, restructuring, impairment of
non-current assets, capital gains on the disposal of businesses and income from business combinations including related derivatives
2
Capital expenditure on property, plant and equipment as well as intangible assets
Division sales at a new high
The Wiring Systems Division increased its sales further in 2012, generating a new high. The segment’s external
sales increased by 9 percent year on year, or € 182.6 million, to € 2,206.4 million. Of this total, consolidation in
full for the first time of Daekyeung (LEONI Wiring Systems Korea) accounted for € 120.5 million. The key sales
drivers included wiring systems and cable harnesses for the main car models of the automotive groups as well
as for the commercial vehicle industry. In this market LEONI supplies the leading manufacturers in Europe and
the United States. Various new product start-ups for the new and successor models of European carmakers
provide backing for the direction taken. We also recorded encouraging gains with electromechanical components as well as with products for vehicles with electric drive.
In regional terms, LEONI once again made strong gains in the BRIC countries of China and Russia. Business in
China reflected the strong growth among German premium car manufacturers, from which we benefited as a
major supplier to these companies. In Russia, our good local presence with two of our own production facilities, which we expanded further during the year under report, exerted a positive effect. In the Americas LEONI
registered strong demand from both the premium carmakers and the commercial vehicle industry. Overall,
overseas sales grew significantly. The weak state of the southern European markets held business in Europe
back and remained at roughly the previous year’s level.
Wiring Systems external sales 2008
€ million
1,510.5
2009
1,224.6
2010
1,634.2
2011
2,023.8
2012
2,206.4
1
70
Wiring Systems Division external sales by quarter
2011
2012
€ million
1st quarter
500.2
570.0
2nd quarter
513.3
555.8
3rd quarter
474.5
537.5
4th quarter
535.8
543.1
EBIT reaches € 134.5 million despite exceptional charges
The Wiring Systems Division generated earnings before interest and taxes of € 134.5 million in fiscal 2012,
down from € 146.2 million in the previous year. The decline is attributable primarily to the non-recurring
adverse effects of the Daekyeung takeover, which resulted in a loss of € 25.1 million for LEONI Wiring Systems
Korea. The division also had to absorb restructuring expenses for the closure of a facility in Tunisia.
Wiring Systems EBIT
€ million
2008
23.4
2009
(78.5)
2010
74.3
2011
146.2
2012
134.5
Order book well filled
Based on our strong competitive position, we again obtained numerous contracts for new and follow-on
projects from the international motor vehicle industry. Among others, we received orders for wiring systems
and engine cable harnesses for various new vehicles and successor models. These concern above all our facilities in China, India and Russia. In the green technology segment, we received an order for cable harnesses for
the range of low-emission engines of a European volume manufacturer that are conform to the new Euro 6
standard. Business Unit Electromobility also secured crucial development and series production contracts: a
major German automotive group ordered high-voltage (HV) battery cable harnesses and wiring systems for
a small car as well as HV wiring systems for all the platforms of its sports car models. Furthermore, a German
premium car manufacturer ordered charging cables for a new electric vehicle. BU Components also succeeded
in obtaining a new contract with a German premium carmaker. This covers the supply of distributor boxes for
the next small car generation.
These new contracts helped our order book to remain well filled and provided us with prospects for
multi-year growth. Orders amount to more than € 11 billion over the next five years. We thereby exceeded our
medium-term growth budget of last year. The amount of product that our automotive customers actually call
forward determines the precise extent and timing of our shipments to the vehicle industry.
Company information
71
Wire & Cable Solutions Division
Business model and organisational structure
The Wire & Cable Solutions Division’s range of products and services encompasses wires, strands and optical
fibers, standardised cables, special cables and completely assembled systems as well as related services for a
wide variety of industries, especially so in the automotive, capital goods, medical technology, telecommunications, infrastructure as well as household and electrical appliance sectors. LEONI in this respect focuses on
technologically sophisticated products as well as customer-specific applications for niche markets. Solutions
for the global trends of mobility, population growth and demographic change, urbanisation, globalisation, environmental awareness and shortage of resources as well as industrialisation and automation are of mounting
LEONI Studer Hard AG deemed not to fit into core operations – involving the
Notes
page 160
under report. Other than that, the range of products and services did not materially change in 2012.
Services
Cable systems
Cable harnesses
Copper cables
Hybrid cables
Wires and strands
Optical cables
Optical fibers
In organisational terms, the Wire & Cable Solutions Division is structured into the following five Business
Groups: Automotive Cables, Industry & Healthcare, Communication & Infrastructure, Electrical Appliance Assemblies as well as Conductors & Copper Solutions. This is therefore in line with the Group’s five core markets.
The operations of the five business groups are structured into a total of 16 business units. These business units
function flexibly; they are in worldwide charge of products, plants, markets as well as customers and responsible for profitability.
For China, this segment’s most significant growth region, there is an additional organisational unit, namely
a Business Area. It runs the operations in China together with the business groups and was further expanded
in 2012. In addition there are corporate departments that perform services for all business groups, business
units and subsidiaries. Work started in 2012 on setting up a new corporate Business Development department,
which will focus on research & development as well as innovation.
Our customer base comprises the majority of wiring system manufacturers and numerous automotive
suppliers worldwide as well as the key providers in the other sectors that we supply in more than 90 countries.
We maintain close relationships with our customers for many years. Particularly our sales and development
departments are in constant contact with customers. In many projects LEONI is closely involved as a product or
system supplier and solution provider as early as the design and planning phase.
Development / Engineering
Products and services Wire & Cable Solutions
importance. The operations of
sterilisation of medical and pharmaceutical raw materials, products and packaging – were sold during the year
72
The most important sales regions are Europe including Germany, followed by Asia and North America. Our
international sales network is continually being enlarged to further raise our market penetration in the developed economic regions and to broaden our footprint in such focal regions as the BRIC countries. In addition
to targeted growth projects in area and large customer marketing, we launched a wide-ranging initiative for
page 73
this reason in the context of the strategic lever of
globalisation. The key customers in the individual business
groups are looked after by key account managers with sector knowledge. For the strategically most important
large customers, the division set up key account management overarching its business groups in 2012 in order
to be able to offer these customers a range of solutions from the various business groups that is tailored to
their particular requirements.
The division’s up-to-date production facilities are located in the most significant economic regions around
the world: in Western and Eastern Europe, North America as well as Asia/China. We are continuing to expand
our capacity above all in growth markets like China, India and Mexico. The facilities are favourably located in
the proximity of customers. Our production networks and supply chain are continually optimised to make the
best possible use of available capacity and to reduce the complexity of structures.
Competitive situation and advantages
The Wire & Cable Solutions Division, which is the third-largest cable business in Europe, is the technology and
market leader in many of its target areas. With some of our products, such as automotive cables for the car
industry and special cables for the solar industry, we even command a leading position worldwide.
Our crucial competitive advantages include a vertically strongly integrated value chain, core skills developed over decades such as a broad understanding of raw materials and know-how concerning input materials,
engineering and applications as well as command of technologically sophisticated manufacturing processes
across all the links in the value chain. Our increasing systems expertise also enhances our opportunities in the
market.
Strategy
The Wire & Cable Solutions Division’s strategy is aimed at qualitative growth, sustained higher margins as well
as attaining and keeping a leading competitive position for the majority of our business groups and units. The
basic alignment is formulated in the ‘WCS 4ward’ strategy programme.
The ‘WCS 4ward’ name refers to the four levers presented under the
Group strategy. For the WCS division
the targets consequently are:
Group strategy
page 51
Company information
73
Overview of Wire & Cable Solutions strategy
Levers
WCS definition
The division‘s objectives
Globalisation
Stepping up
internationalisation
Innovation
Enhancing
innovative capacity
System business
Expansion
of the system business
Efficiency
Realising
synergies
Expansion of international sales network
Expansion of international production network
Safeguarding of market position and financial targets
by developing future markets (e.g. green technology,
medical technology, mobility, automation) and future technologies
(e.g. miniaturisation, high frequency, fiber optic cables) in
order to share disproportionately strongly in their growth
Strengthening the culture of innovation based on an efficient
development network across the Group‘s globally interlinked facilities
Improving the position among new and existing customers
in relevant target markets by enhancing engineering expertise,
greater integration in customers‘ processes and intelligent combination
of material, product and process technologies
Exploiting growth potential in line with the global trends
Tapping of business group and functional unit-transcending synergies in
order to be ideally positioned with lean and flexible cost structures as
conditions become more volatile
Systematic knowledge transfer to facilitate better exploitation
of the business groups‘ individual strengths across the division
and also the whole Group
Harmonization and standardization of IT supported processes
Progress was made with respect to all four levers in 2012:
Internationalisation during the year under report concentrated on the growth region of Asia and the NAFTA
area. In Business Area China we further expanded and optimised our activity. Based on the steadily rising
demand for data and sensor cables for safety and comfort applications in cars, we set up a production line for
corresponding special cables at our plant in Changzhou.
74
The WCS division set up its own facility in India in order to tap the sub-continent’s major potential. The new
plant north of the industrial metropolis Pune, one of India’s three major automotive clusters, went into operation at the end of 2012. Initially the facility will produce automotive cables for the car industry. Later in 2013
production will be expanded to include cables for large petrochemical plants, railway engineering as well as
the solar industry.
The WCS division also strengthened its presence in the NAFTA area. At our facility in Mexico we set up a
line to produce special automotive cables; in the same location we also created capacity for instrumentation
cables for the petrochemical industry. Based on the strongly growing demand from the robotics industry, the
semiconductor industry as well as the machinery and mining industries in Canada, the division made more
space for cable production in North America. Business Unit Fiber Optics’ expanding business was strengthened through acquisition of key assets of the Richard Losch Inc. company of Bend, Oregon, which specialises in
solutions for high-performance lasers.
In addition, we expanded our international sales network in China and in the NAFTA area and condensed
it further with our own branch offices in new regions. LEONI Middle East FZE, which will focus mainly on
infrastructure projects, was established in Dubai at the beginning of November 2012. New constructions such
as office buildings, airports and shopping centres provide great potential in the Middle East for high-quality
cabling systems.
In the context of the efficiency lever we launched various projects to optimise business processes and to
standardise IT systems. This included
■■
executing operational excellence projects at select locations to improve the production processes
■■
taking the first steps towards implementing a production planning and management system that is standard across all business groups
■■
starting to standardise staff qualifications, structures and processes in line with the ‘HR Solutions’ Group
initiative
■■
in various regions reducing the number of legal entities, for example in China and Slovakia.
The key progress in the context of the innovation and system business levers is presented in the section on
Research and Development
page 98
Research and Development.
Company information
75
Performance in 2012
Key figures Wire & Cable Solutions
2012
2011
Change
External sales
€ million
1,602.6
1,677.7
(4.5) %
EBIT
€ million
101.3
90.9
+ 11.4 %
Adjusted EBIT1
€ million
75.2
94.9
(20.8) %
%
6.3
5.4
—
EBIT margin
Capital expenditure
2
2
49.5
53.7
(7.8) %
number
8,096
7,925
+ 2.2 %
Earnings adjusted for the impact of revaluation as part of allocating the prices of the major acquisitions, restructuring, impairment of non-current assets, capital gains on the disposal of businesses and income from business combinations including related derivatives
Capital expenditure on property, plant and equipment as well as intangible assets
Sales at a solid level
The Wire & Cable Solutions Division generated external sales of € 1,602.6 million in fiscal 2012. Although this
equates to a 4.5 percent decline vis-à-vis the previous year’s record level, it was nevertheless the division’s
second-highest ever sales total. Given the macroeconomic and sector-specific conditions as well as against the
backdrop of the lower price of copper compared with the previous year, this therefore constituted attainment
of a formidable level. Order receipts for the whole of 2012 amounted to € 1,569.5 million (previous year:
€ 1,675.2 million).
Especially in the automotive sector, but also including cable harnesses for medical technology applications
and household appliances, capacity was very well utilised throughout the year. The demand for automation technology was initially satisfactory, but then dipped somewhat in the course of the year. The business
comprising solar, data and infrastructure cables suffered on the one hand from overcapacity and, on the other
hand, under the macroeconomic conditions, particularly so the sovereign debt crisis in Europe. We also had to
contend with a significant decline in sales of cables for petrochemical plant in the fourth quarter because of
the tightening at short notice of EU export regulations.
Wire & Cable Solutions external sales
€ million
2008
1,401.5
2009
935.5
2010
1,321.5
2011
1,677.7
2012
1,602.6
1
€ million
76
Wire & Cable Solutions Division external sales by quarter
2011
2012
€ million
1st quarter
410.5
399.1
2nd quarter
430.3
411.8
3rd quarter
438.6
417.3
4th quarter
398.3
374.4
Earnings increase due to sale of Studer Hard
The segment’s EBIT rose from € 90.9 million to € 101.3 million in the period under report. This figure includes
a non-recurring gain of € 28.3 million from the sale of LEONI Studer Hard AG. This was offset by the absence of
an earnings contribution from this activity, smaller profit contributions due to the sales decline and a slump in
prices especially involving products for the solar industry in Business Group Communication & Infrastructure
as well as change in the product mix in the automotive cables business. Furthermore, the restriction imposed
by the EU at short notice on exports to Iran resulted in an unplanned burden on earnings.
Wire & Cable Solutions EBIT
€ million
2008
29.6
2009
(34.2)
2010
56.3
2011
90.9
2012
101.3
Percentage share of Wire & Cable Solutions Division 2012 sales by business group
Conductors & Copper Solutions 9.6 %
Electrical Appliance Assemblies 7.7 %
Automotive Cables 39.5 %
Communication & Infrastructure 23.5 %
Industry & Healthcare 19.7 %
Performance of the Business Groups 2012
Business Group Automotive Cables
■■
Company information
77
Strong demand for premium vehicles in the United States and China compensating
for declining business among volume manufacturers in Europe
■■
Strategically important new contracts: special cables for measuring the emissions on various car models of
well-known manufacturers (Euro 6 standard) as well as cables for fast-charging electric vehicles
A major wiring system manufacturer gained as a new customers for standard cables
Sales performance
€ million 433.6
599.8
Products
633.1
Cables for
700
600
Wiring systems
Communication / telematics
Drive and engine systems
Exhaust systems
Hybrid and fuel cell vehicles
Safety and assist systems
500
400
300
200
100
0
2010
2011
2012
Business Group Industry & Healthcare
■■
Business involving cables and cable systems for medical technology and robotics continues to do very well
■■
Demand from the automation engineering sector weakened in the course of the year
■■
Fiber Optics has an important new contract in the segment comprising smart grids for glass fiber cables
Sales performance
€ million 266.1
332.8
Products
315.7
Cables and cable systems for
700
600
500
400
300
200
100
0
2010
2011
2012
Machinery and plant engineering
Automation and drive technology
Measurement and control technology
Robotics
Specialist vehicles
Aerospace technology
Telecommunications
Medical devices
■■
78
Business Group Communication & Infrastructure
■■
The financial crisis and overcapacity in the market is adversely affecting activity
involving data, solar and infrastructure cables in Europe
■■
Tightened Iran embargo caused a loss of sales in the fourth quarter
■■
Stepping up collaboration with the Chinese photovoltaic industry
Sales performance
€ million 346.3
424.0
Products
376.8
700
Cables and cable systems for
Civil and structural engineering as well as transport infrastructure
- safety and installation cables as well as installation systems
Large plant and refineries
- project-specific instrumentation and power cables
Railway engineering and shipbuilding
600
500
400
300
200
100
0
2010
2011
2012
Business Group Electrical Appliance Assemblies
■■
New customers in the multinational household appliance industry
■■
Solid business with local Chinese manufacturers
Sales performance
€ million 126.0
129.5
Products
123.8
Cable systems for
700
600
500
400
300
200
100
0
2010
2011
2012
Small appliances
Irons
Vacuum cleaners
Consumer electronics
Washing machines
Refrigerators
Tools
Lighting industry
Business Group Conductors & Copper Solutions
■■
Chinese facility concentrating on specialist strands
■■
Production of standard strands scaled back
■■
Expansion of specialist wires business (Histral, alloys)
Sales performance
€ million 149.5
191.6
Products
153.2
Wires and strands for
700
600
Special cable industry
Heating system manufacturers
Solar and wind power industry
500
400
300
200
100
0
2010
2011
2012
Company information
79
Group sales and earnings
Solid growth in consolidated sales
LEONI AG increased its consolidated sales by about 3 percent, or € 107.5 million, to € 3,809.0 million in 2012
despite the mounting economic headwind during the year. The growth was the result above all of the consolidation in full for the first time of the South Korean wiring systems manufacturer Daekyeung, meanwhile LEONI
Wiring Systems Korea, which generated sales of € 120.5 million in the past year. Organic growth accounted for
€ 17.6 million. The trend in the price of copper, on the other hand, exerted a negative effect of € 30.6 million.
Exchange rates accounted for € 91.4 million of the sales growth.
substantial 30 percent to € 588.9 million. We also generated strong growth in the NAFTA countries with an
increase of more than 24 percent to € 521.9 million. This more than offset the decline of nearly 4 percent to
€ 1,028.8 million in Germany and of 7 percent or more to € 1,354.3 million in the rest of Europe. Outside Europe
we generated business totalling € 315.1 million as opposed to € 304.0 million in the previous year.
Consolidated sales
€ million
2008
2,912.0
2009
2,160.1
2010
2,955.7
2011
3,701.5
2012
3,809.0
Consolidated sales by quarter
2011
2012
€ million
1st quarter
910.7
969.1
2nd quarter
943.7
967.6
3rd quarter
913.1
954.7
4th quarter
934.0
917.6
In regional terms, consolidated sales in the BRIC countries including South Korea were up by an especially
80
Consolidated sales by division 2012
Wire & Cable Solutions 42.1 %
Wiring Systems 57.9 %
Other foreign countries 8.2 %
NAFTA 13.7 %
EU excl. Germany 35.6 %
BRIC incl. South Korea 15.5 %
Germany 27.0 %
Sale of LEONI Studer Hard underpins consolidated earnings
The cost of sales in 2012 increased roughly in line with the amount of business, i.e. by about 3 percent, to
€ 3,134.0 million even though copper and other metal prices were on average lower than in the previous year,
there were numerous new product start-ups in the Wiring Systems Division and a major financial burden was
simultaneously caused by the integration of Daekyeung. We succeeded in counteracting this with our efficient
cost management and even increased consolidated gross profit slightly from € 672.1 million to € 675.0 million. The gross margin came to 17.7 percent, down from 18.2 percent in the previous year.
Selling and administrative expenses increased at a significantly greater rate than consolidated sales in
2012 – by about 6 percent to € 192.2 million and by 18 percent to € 185.3 million, respectively. In particular, this
clearly reflected the impact of LWS Korea. In addition there were high project costs pertaining to improvement
of the IT infrastructure. Research and development expenses increased due to numerous new product startups, which will provide us with major sales potential in the medium and long term, by about 11 percent to
€ 93.6 million. Restructuring costs amounting to € 9.5 million (previous year: € 2.4 million) were also incurred in
2012. Mainly these include severance payments made by the Wiring Systems Division and concerned, among
others, production facilities in Tunisia and Morocco as well as in China in connection with the acquisition of
Daekyeung.
On the other hand, the strong increase in other operating income of € 9.9 million to € 48.9 million boosted
earnings. Above all, this reflected the successful disposal of LEONI Studer Hard. After netting the sale proceeds
against the missing contribution to earnings, the positive effect on EBIT was one of € 25.9 million. This virtually offset the cost increases in the other areas, meaning that the fiscal 2012 consolidated earnings before
interest and taxes (EBIT) of € 235.8 million were only slightly below the 2011 figure of € 237.1 million. EBIT
adjusted for the sale proceeds as well as restructuring charges and other items came to € 225.4 million, as opposed to € 260.3 million in the previous year.
Company information
81
The financial result improved from a shortfall of € 41.0 million to one of € 38.1 million. The key in this respect
involved exchange gains on financing activity, which resulted in greater finance revenues of € 4.8 million, up
from € 1.8 million in the previous year. Finance costs remained unchanged at € 42.8 million.
Overall, earnings before taxes rose slightly by about 1 percent to € 197.9 million in 2012. Tax expense was
up from € 40.3 million to € 41.9 million. The still comparatively low tax rate of 21.2 percent (previous year:
20.5 percent) was due mainly to the impact on earnings of the changes in the scope of consolidation, which
involved minor tax expense. On the bottom line, the Company reports consolidated net income of € 156.0 million for the 2012 financial year, thus matching the previous year’s record level.
Consolidated EBIT
2008
55.7
2009
(116.3)
2010
130.7
2011
237.1
2012
235.8
Consolidated EBIT by quarter
2011
2012
€ million
1st quarter
61.4
93.7
2nd quarter
67.6
50.8
3rd quarter
54.6
52.7
4th quarter
53.5
38.6
Value creation
The LEONI Group increased its net value creation by about 7 percent in 2012, to € 968.3 million. It is calculated
on the basis of sales revenues and other income less cost of materials, depreciation/amortisation and other
advance payments and thus represents LEONI’s own output. The largest part of the value created is spent on
staff. In 2012 they received a share of € 732.3 million, or 75.6 percent, in the form of wages and salaries as well
as social benefits. Our shareholders, government and our lenders received similarly large shares of 5.1 percent,
4.3 percent and 3.9 percent respectively. To strengthen our financial base, 11.1 percent was retained in the
Company.
Accruement
Sales revenues
Other income
€ million
2012
2011
3,809.0
3,701.5
48.9
9.9
(2,294.4)
(2,238.5)
Less depreciation / amortisation
(116.2)
(107.0)
Less advance payments
(479.0)
(459.5)
968.3
906.4
Less cost of materials
Net value added
€ million
82
Distribution
€ million
2012
2011
to staff (personnel costs, social security contributions)
732.3
669.1
to the Company (retained income) 1
107.0
107.0
49.0
49.0
41.9
40.3
38.1
41.0
968.3
906.4
to shareholders (dividend) 2
to government (income taxes)
3
to creditors (financial result) 4
Net value added
1
2
3
4
consolidated net income less dividend
subject to the approval of shareholders at the AGM
income taxes only (excl. excise, property and transaction taxes as well as social security contributions)
excl. other investment income
Distribution of value added 2012
Creditors 3.9 %
Government 4.3 %
Shareholders 5.1 %
Employees 75.6 %
Company 11.1 %
Financial situation
Finance strategy
The LEONI Group has a solid, balanced finance structure as its permanent objective. The aim is to have an
equity ratio of about 35 percent and gearing below 50 percent on a sustained basis so as to lastingly safeguard
the Company’s strong acceptance by the capital market as well as banks and suppliers. We use the capital
market to cover our long-term financing requirement. We obtain short-term finance via credit lines from our
core banks. Deutsche Bundesbank has rated LEONI as an eligible borrower for more than a decade. The rating
agencies are not commissioned to issue a rating because this would, in LEONI’s view, not provide any added
benefit. As in the preceding years, LEONI does not have any financial covenants to fulfil for borrowings. Our
growth is normally to be funded via net cash flow. Furthermore, we take special care that significant expansion surges – especially in the case of acquisitions – are backed to an appropriate extent by equity. Details on
Notes
page 195
capital management are contained in the
Notes.
Finance and liquidity management
The LEONI Group’s financial management is centrally handled by the LEONI AG holding company. It takes
the necessary measures for the entire group of companies, based on ascertaining the capital requirement at
corporate level. In exceptional cases we transact regional, special finance deals. The most important objectives
Company information
83
of financial management are safeguarding the Group’s liquidity worldwide, optimising finance costs and revenue as well as controlling and minimising currency and interest rate risks. We use a wide range of instruments
to keep our exposure to individual markets or types of finance as low as possible. Generally speaking, LEONI
pursues long-term collaboration with international banks that is based on mutual trust. Group subsidiaries are
financed mostly in their functional currency. As in the previous year, the principal financial liabilities in 2012
were denominated in euros, US dollars and, among our Chinese subsidiaries, in yuan.
Among other means, we manage our liquidity via a cash pooling system with pools in the home countries
of the currencies of most importance to the Group. Furthermore, LEONI AG executes the majority of the payments for the Group.
In order to be able to reliably meet all our financial obligations at any time, we use capital market instruments such as bonds and borrower’s note loans at the corporate level for the whole Group and obtain credit
lines in sufficient amounts. Existing credit lines were extended in 2012 to ensure liquidity. On the 31 December
2012 there were short and medium-term credit lines from banks amounting to € 486.0 million (previous year:
€ 330.6 million) with terms up to 36 months, of which € 23.9 million were utilised at short term on the reporting date (previous year: € 36.1 million).
The off-balance sheet instruments leasing and factoring, which we use to improve liquidity, are also managed at head office. Factoring in particular constitutes an important addition to the other short-term liquidity
management instruments because of its flexibility with respect to the trend of sales and the associated need
for finance. At the end of 2012, factoring reduced trade receivables by the amount of € 91.3 million (previous year: € 118.0 million). Of the other liabilities, € 32.6 million (previous year: € 20.6 million) was due to the
receipt of payment on receivables that were sold within factoring agreements. Further details on leasing are
contained in the
Notes.
Notess
page 187
Interest rate and currency hedging
Interest rate risks on money-raising measures are hedged with underlying instruments such as swaps and collars. As at 31 December 2012 the nominal amount of existing interest rate swaps was € 63.5 million (previous
year: € 126.2 million) and the amount of collars was € 136.0 million as in the previous year.
To minimise the impact of exchange rate variation on consolidated earnings, foreign currency items are
netted within the Group. For the other amounts we make use of currency hedging transactions; mostly in
Egyptian pounds, pounds sterling, Chinese yuan, Japanese yen, Canadian dollars, Mexican pesos, Polish zloty,
Romanian leu, Swiss francs, Singapore dollars, Turkish lira, Hungarian forint, and US dollars. At the end of 2012,
they totalled € 484.4 million versus € 454.8 million on the same closing day one year earlier. Further information on interest rate and currency risks is contained in the
Notes.
Long-term refinancing secured at an early stage
As planned, LEONI secured the refinancing due in 2013 already in 2012. In September of last year we successfully placed a borrower’s note loan in the amount of € 250 million. This therefore significantly exceeded the
originally planned amount of € 150 million. The increase was possible because the issue was significantly
oversubscribed and the price settled at the lower end of the projected range.
Notes
page 191
84
The total amount of the new loan is split into seven tranches with maturities of five, six, seven and ten years.
The deal was arranged by a syndicate comprising UniCredit, LBBW and HSBC. The thereby repaid borrower’s
note loans would normally not have matured until March 2013 and March 2015. With this early refinancing we
took advantage of the currently favourable level of interest rates and rescheduled our financing structure. We
simultaneously succeeded in improving the spread of maturities of financial liabilities.
In December 2012, furthermore, we signed a development loan agreement with the European Investment
Bank in the amount of € 100 million on favourable terms that will be drawn upon as required. The following
chart provides an overview of the existing long-term finances.
Finance structure
Long-term finance
Amount
(in € million)
Placed
(year)
Term
(to year)
200.0
2006
matures 2013
24.0
2008
matures 2013
Borrower’s note loan
26.5
2008
matures 2015
136.0
2012
matures 2017
37.0
2012
matures 2018
68.0
2012
matures 2019
9.0
2012
matures 2022
Bond
Cost of capital and ROCE
The weighted average cost of capital (WACC) for the LEONI Group amounted to 7.92 percent at the end of
2012, up from 7.64 percent in the previous year. The increase was mainly the result of the higher market risk
premium as well as the larger proportion of equity.
Calculation of weighted average cost of capital (WACC)
2012
2011
Risk-free interest
2.25 %
2.37 %
Market risk premium
6.00 %
5.50 %
1.40
1.46
10.65 %
10.40 %
Beta factor
Cost of equity after tax
Borrowing costs before tax
Tax rate
Borrowing costs after tax
4.91 %
25.00 %
1.23 %
4.79 %
25.00 %
3.68 %
1.20 %
3.59 %
Equity proportion
60.87 %
59.50 %
Proportion of borrowed funds
39.13 %
40.50 %
7.92 %
7.64 %
Cost of capital after taxes (WACC)
The return on capital employed (ROCE) stood at 20.8 percent (previous year: 22.9 percent) and was thus
slightly above the 20 percent target.
Consolidated statement of cash flows: solid operating cash flow
Based on the once again good earnings – adjusted for the gain on the sale of LEONI Studer Hard – LEONI generated a cash inflow from operating activities of € 211.7 million in 2012. The decrease from the previous year’s
Company information
85
figure of € 246.1 million is attributable mainly to increased income tax payments, additional costs to integrate
Daekyeung and greater spending on restructuring.
As part of our capital investment activity we spent a total of € 125.5 million in the past year (previous year:
€ 126.9 million). This involved proceeds in the amount of € 51.0 million from the sale of LEONI Studer Hard offset against the large increase in spending on intangible assets as well as property, plant and equipment from
€ 127.4 million to € 160.6 million. The cash receipts from disposal of assets amounted to € 9.1 million (previous
year: € 3.0 million).
The Group spent cash of € 153.6 million on financing activity in 2012, whereas there was an inflow of
the amount of € 359.6 million (previous year: € 65.9 million). Yet the dividend that LEONI AG paid out to its
shareholders, of € 49.0 million, also more than doubled versus the previous year. These cash outflows stood
opposed to inflows of € 255.0 million (previous year: € 23.5 million) mainly from the successful placement of a
borrower’s note loan.
The total of all payment transactions in 2012 involved a decrease of € 67.4 million in cash and cash equivalents. When taking exchange rate-related changes in the negative amount of € 0.3 million into account, total
cash and cash equivalents stood at € 298.3 million on 30 December 2012, down from € 366.0 million one year
earlier.
Consolidated statement of cash flows (abridged version)
€ million
2012
2011
211.7
246.1
Cash used for capital spending activities
(125.5)
(126.9)
Cash used for / provided by financing activities
(153.6)
48.3
Decrease of / increase in cash and cash equivalents
(67.4)
167.5
Cash and cash equivalents on 31 December
298.3
366.0
Cash provided by operating activities
Operating cash flow
€ million
2008
132.7
2009
88.8
2010
142.3
2011
246.1
2012
211.7
€ 48.3 million in the previous year. This reflected mainly the substantial repayment of financial liabilities in
86
Free cash flow in line with projections
Free cash flow before acquisitions and divestments amounted to € 63.5 million in 2012 and was thus in line
with our projections. The opposing, moderate increase in net financial liabilities by € 15.3 million to € 249.2
million was due mainly to inclusion of the financial liabilities of Daekyeung as part of consolidating the company for the first time.
Calculation of free cash flow *
€ million
2012
2011
Net income
156.0
156.0
Write-downs / impairment cost
116.2
115.2
Changes in working capital
(31.6)
(48.3)
Other
(28.9)
23.2
Cash used for capital spending excl. acquisitions and divestments
Free cash flow
211.7
246.1
(148.2)
(124.9)
63.5
121.2
*before acquisitions and divestments
Free cash flow *
€ million
(13.9)
2008
2009
2.1
2010
50.7
2011
121.2
2012
63.5
* before acquisitions and divestments
Capital expenditure
The LEONI Group invested a total of € 180.9 million in 2012, about 29 percent more than in the previous year.
Of this total, acquisitions and investments accounted for € 26.7 million (previous year: € 2.7 million), most of
which was spent on the purchase of the outstanding 50 percent share in the South Korean wiring systems
Notes
page 158
specialist
Daekyeung. Group-wide, spending on property, plant and equipment as well as intangible assets
was up by more than 12 percent to € 154.2 million.
In the Wiring Systems Division spending on assets rose more than 29 percent to € 98.7 million. Production
capacity was expanded particularly in the BRIC countries in keeping with our emerging markets strategy. One
important project involved expansion of the facility in Brazil, which previously produced only cables harnesses
for commercial vehicles, to include a line for producing wiring systems for cars. We also set up a new, larger
production facility in the Russian automotive region of Nizhny Novgorod near Moscow and relocated our
existing operations to it. In China we made preparations for an additional facility near Beijing, which is to be
completed in 2013. In connection with various new and follow-on projects with our customers in the car and
commercial vehicle industry, the division also invested in existing plants in China, Mexico, North Africa, Eastern
Europe and Russia. We also launched a new production management project and started to upgrade the head
office in Kitzingen to be able to efficiently direct and manage this expanding division in the future as well.
Company information
87
The Wire & Cable Solutions Division invested € 49.5 million in property, plant and equipment as well as
intangible assets in the past financial year (previous year: € 53.7 million). The focus was on expanding capacity
for the production of special automotive cables in China, Mexico and Slovakia. In addition, the division set up a
line to produce infrastructure cables in Mexico and started construction of a new facility in India.
Notes.
Details on key capex commitments existing as at the reporting date are contained in the
Capital expenditure*
Wiring Systems
LEONI AG
93.6
Notes
page 187
€ million
53.1
11.7
2008
41.6
37.1
158.4
3.1
81.8
2009
43.4 2.2
103.1
76.3
2011
53.7
7.4
98.7
137.4
49.5 6.0
2012
154.2
* excluding acquisitions and investments
Group capital expenditure by region 2012
Asia 5.7 %
Rest of Europe 5.9 %
America 8.0 %
Germany 40.0 %
North Africa 16.4 %
Eastern Europe 24.0 %
Asset situation
Equity ratio above 35 percent
The consolidated balance sheet was enlarged only moderately versus the previous year, namely by about
3 percent to € 2,384.1 million as at 31 December 2012, despite the first-time consolidation in full of Daekyeung.
The key factors in this respect were the reduction of financial liabilities as well as our proactive working capital
management.
On the asset side, cash and cash equivalents were down from € 366.0 million to € 298.3 million due mostly
to the repayment of financial liabilities as well as the substantially increased dividend payout. At the same
time, we limited the increase in trade receivables and other financial assets to about 5 percent to € 478.1 million as well as inventories to roughly 6 percent to € 488.5 million by way of targeted management measures.
Overall, there was little change in current assets, which came to € 1,366.0 million.
57.5
2010
88
The significant increase in property, plant and equipment of more than 8 percent to € 677.2 million was, along
with consolidation effects, due mainly to our proactive capital investment policy. There was also a strong rise,
from € 59.1 million to € 91.1 million, in intangible assets, which was attributable almost exclusively to having
consolidated Daekyeung in full for the first time. Investments in associated companies and joint ventures
simultaneously diminished from € 22.4 million to € 0.7 million. Our 50 percent shareholding in Daekyeung was
previously recognised in this item. Overall, non-current assets were up by about 7 percent to € 1,018.0 million.
On the liabilities side of the consolidated balance sheet, the key impact involves the LEONI Group’s premature refinancing in 2012 with the successful placement of the borrower’s note loan. The borrower’s note loans
not maturing until 2013 and 2015 were thereby almost entirely repaid. Overall, non-current financial
liabilities were down from € 493.6 million to € 276.6 million. This decrease was the consequence primarily
of having reclassified the bond maturing in July 2013 in the nominal amount of € 200 million as well as other
debts with remaining terms of less than one year to current financial liabilities. For this reason in particular,
current financial liabilities increased substantially despite large principal repayments, namely from
€ 106.3 million to € 270.9 million. In total, the LEONI Group’s financial liabilities as at 31 December 2012
amounted to € 547.5 million (previous year: € 599.9 million). Net financial liabilities totalled € 249.2 million on
the reporting date (previous year: € 233.9 million).
Due above all to the integration of Daekyeung, the item comprising trade liabilities and other financial liabilities increased by about 5 percent to € 639.4 million. Short-term provisions, on the other hand, were down
from € 47.2 million to € 35.9 million. Most of this was spent in a targeted way on predetermined measures. A
small proportion was reversed because the amounts set aside are no longer required.
We made further progress in terms of equity, which rose by about 15 percent to € 845.1 million thanks to the
good earnings performance. Retained earnings increased by about 29 percent to € 479.3 million. Accumulated
other comprehensive income, in which differences due to currency translation and cash flow hedges are recognised, amounted to € 40.6 million as compared with € 40.0 million at the end of 2011. The equity ratio improved
from 31.8 percent to 35.4 percent. We therefore met the 35 percent target we set ourselves for the medium
term. Gearing stood at a solid 29 percent at the end of the year.
Asset and capital breakdown
Current assets
€ million
31/12/2012
31/12/2011
1,366.1
1,369.4
Non-current assets
1,018.0
951.2
Total assets
2,384.1
2,320.6
1,122.9
943.9
416.1
639.2
Current liabilities
Non-current liabilities
Equity
Total equity and liabilities
845.1
737.5
2,384.1
2,320.6
Property, plant and equipment, intangible assets, goodwill
€ million
2008
839.4
2009
796.6
2010
809.6
2011
837.7
2012
917.7
Equity ratio
24.2
2009
21.0
2010
23.8
2011
31.8
2012
35.4
Calculation of net financial liabilities
€ million
2011
Change
Cash and cash equivalents
298.3
366.0
(67.7)
Current financial liabilities
(270.9)
(106.3)
(164.6)
Non-current financial liabilities
(276.6)
(493.6)
217.0
Net financial position
(249.2)
(233.9)
(15.3)
Equity and net financial liabilities
Equity
€ million
Gearing
%
2008
447.7
533.2
119
2009
369.1
495.4
134
2010
481.2
444.6
92
2011
737.5
233.9
32
2012
845.1
249.2
29
%
2008
2012
Company information
89
90
Procurement
Slightly below-par increase in cost of materials
The purchase of raw and plastic materials as well as of components accounts for a large proportion of LEONI’s
value chain. Group-wide, the cost of materials rose by 2.5 percent to € 2,294.4 million in 2012, equating to
60.2 percent of sales and down from 60.5 percent in the previous year.
In the Wire & Cable Solutions Division the cost of materials dropped by about 7 percent to € 1,172.3 million
or 73 percent of external sales (previous year: 75 percent). Copper remains the most important raw material
with a quantity of more than 100,000 tons. In addition there are such other metals as nickel, silver and tin. As
in the previous year, plastics were the second-largest group of materials with more than 50,000 tons. These
included such special insulation materials as polyurethane, thermoplastic elastomers and fluoropolymers; such
standard plastics as polyethylene and polyvinylchloride and plasticizers for production of PVC components.
The Wiring Systems Division buys cables and conductors for the manufacture of wiring systems mostly
from within the Company. Connectors and fixings, on the other hand, are largely sourced externally. Due
above all to the full takeover of Daekyeung, the cost of materials increased by about 14 percent to € 1,122.1
million during the period under report and thus equated to about 51 percent of external sales (previous year:
48 percent).
Cost of materials in the Wiring Systems Division, proportions of key material groups
Injection moulding parts 7 %
Electrical components 8 %
Connectors 52 %
Fastening parts 12 %
Cables and conductors 21 %
Copper a little cheaper on an annual average
LEONI sources its key raw material, copper, from major strategic suppliers, with the price geared to that quoted
on the London Metal Exchange. In 2012 the price of copper, starting from a low of € 5.90 per kg, initially rose
significantly and reached its high for the year in March at € 6.68 per kg. Thereafter the price settled down. The
average came to € 6.27 and thus to somewhat below the previous year’s level of € 6.42 per kg. The other metals became significantly cheaper in 2012: the prices of tin and nickel dipped by 25 percent in the course of the
year while silver cost on average 26 percent less than in the record year 2011.
Development of copper price 2012 (low DEL price)
Company information
91
€ / 100 kg
800
750
700
High 16/3/2012: € 667.83 / 100 kg
650
600
550
Low 5/1/2012: € 590.38 / 100 kg
500
450
DEL price 2012
400
Annual average
Feb
March
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Plastics persistently expensive
The short supply of special insulation materials eased for LEONI during the year under report thanks to
systematic expansion of its supplier portfolio as well as the generally weakening market demand. Due to the
unabatedly high base prices for these materials however, special insulation materials on the whole remained
expensive.
The prices for standard plastics and plasticizers rose strongly in the first quarter and reached new highs. The
countermove followed in the second quarter and led to a perceptible, albeit also just brief price drop towards
the mid-year mark, which the petrochemical industry quickly corrected by cutting production, however. Supply and demand were thus in balance at a still high price.
Consolidation on the components market
To procure components like connectors and fixings LEONI in 2012 frequently worked with suppliers that are
stipulated by our customers in the automotive industry as part of being awarded the contract. Several takeovers resulted in consolidation on the global market for connectors. We counteracted this rise in the cost of
materials during the period under report by means of intensive, global negotiations with these suppliers; with
new technologies and by substitution.
Collaboration with key suppliers bolstered further
Enhancing and maintaining supplier capital plays an important role for LEONI. The WCS Division systematically
continued to develop its supplier management in 2012 especially with respect to qualification and assessment
to ensure reliable supply of raw materials and special insulation materials via suitable suppliers and sources.
The supplier pool was internationalised further and procurement requirements were, wherever possible, combined worldwide or regionally to stabilise supply and optimise costs. Close collaboration at the global level
as well as early involvement of the suppliers in new projects is essential in the component segment. Further
progress was made in this respect based on the Wiring Systems Division’s development and improvement
programme, launched in the previous year, for the key suppliers.
Jan
92
Employees
More than 59,000 employees worldwide
The LEONI Group employed 59,393 people on 31 December 2012, which is 1,352 fewer than one year earlier.
The workforce initially increased significantly at the beginning of 2012 due to taking over the former Daekyeung employees. Later in the year, adjustments at various wiring system plants in China, Eastern Europe and
North Africa as well as closure of one of the Daekyeung facilities in China and a plant in Tunisia reduced the
number. In the Wiring Systems Division the number of employees therefore dropped by 1,554 year on year, to
51,089 people. The Wire & Cable Solutions Division, on the other hand, enlarged its workforce by 171 to 8,096
employees. The LEONI AG holding company had 208 employees; 31 more than one year earlier.
Broken down by region, the number of staff outside Germany increased by 1,507 to 55,221, equating to
93.0 percent of the total workforce (previous year: 93.4 percent). In Germany the number of staff was up by 155
to 4,172 people. 10.9 percent (previous year: 10.5 percent) of Group employees worked in high wage countries
and 89.1 percent (previous year: 89.5 percent) worked in low-wage countries.
At yearend, the Group had 8,952 staff on temporary employment contracts (previous year: 8,718) to be able
to respond flexibly to possible cyclical fluctuation.
Employees in Germany had an average age of 40.8 years in 2012 (previous year: 40.1) and have on average
worked 11.3 years for LEONI (previous year: 11.5 years). 53 employees were honoured for their 25th anniversary
with the Company. The ratio of severely handicapped employees stood at 2.2 percent (previous year: 2.5 percent). 255 people worked part-time (previous year: 238) and 106 were in partial retirement (previous year: 119).
Group employees
as of 31 December
50,821
49,822
55,156
60,745
59,393
2008
2009
2010
2011
2012
Employees by division
Wire & Cable Solutions 14 %
as of 31 December 2012
Wiring Systems 86 %
Employees by region
2011
2012
as of 31 December
4,017
4,172
Germany
Eastern Europe
20,008
19,129
Rest of Europe
2,049
1,947
America
4,675
4,527
Asia
2,682
5,186
in low wage countries
in high wage countries
43,407
as of 31 December
7,414
50,821
2008
43,426
6,396
49,822
2009
49,134
6,022
55,156
2010
54,353
6,392
60,745
2011
52,891
6,502
2012
59,393
As in the previous years, significant personnel measures were applied in close agreement and constructive collaboration between management and the general works councils in Germany and France, the European Works
Council as well as with local employee representatives and works councils.
Worldwide growth supported by new HR strategy and organisation
A new strategy for the Human Resources (HR) department was developed at the beginning of 2012 that is
based on LEONI’s corporate strategy and is to provide the expected growth with structural support. The objective is to ensure that LEONI is established as an attractive employer in the future as well. This organisational
realignment is focused above all on Group-wide harmonisation of key standards, structures and processes.
The basis of this is formed by the HR Solutions project that has been launched worldwide and with which the
global increase in human resource work will be mapped and supported using state-of-the-art IT systems.
Attractive working conditions
LEONI endeavours to provide its employees with interesting jobs and a motivating, encouraging and constructive setting in order to gain their loyalty to the Company. Among the aspects contributing to this are flexible
working-time models, extensive advanced training options and performance-related compensation.
27,314
24,432
North Africa
Development of number of employees by wage region
Company information
93
94
At the beginning of 2012, LEONI introduced a new performance-related compensation programme in line
with that for the Management Board to create greater incentive and to reward the contributions of individual
teams to corporate success. The target criteria of this Incentive Compensation Programme are return on
capital employed, liquidity and sales performance in the respective organisational unit as well as additional,
individual parameters based on the corporate strategy. We continue to offer an attractive corporate pension
plan involving pay conversion.
Our staff in Germany were, once again in the year under report, able to participate in a wide-ranging
advanced training scheme that teaches specialist and general subjects in sessions held inside and outside the
Company. In addition to multifaceted, specialist qualification programmes, there were, for example, language,
IT and management courses. In total during the year under report, we organised 1,054 training sessions (previous year: 1,042) for 3,698 participants (previous year: 4,651).
For the employee suggestion system, the Wiring Systems Division installed a new ideas management software at the beginning of 2012 that makes it easier both to submit suggestions for improvement and to work on
them. Promotional campaigns and raffles are intended to further motivate staff to submit their ideas. Overall,
nearly 14,000 ideas submitted in Germany in 2012 were deemed useful and implemented (previous year: just
under 10,000).
LEONI contributed with various events and exchange programmes to promoting identification with the
Company and the sense of worldwide togetherness. The LEONI Football World Championship was a key part
of this; an event with the participation of 45 teams from 23 countries.
Occupational health and safety also play an important part in the appeal of a job. You will find information
page 103
on this in the
Sustainability report. Overall, the good level of advancement opportunities offered, corporate
culture, job security, market position, compensation and the work-life balance at LEONI in 2012 led to the
Company being commended as a ‘TOP Employer in Germany’ by the Corporate Research Foundation for the
tenth time.
Promotion of equal rights
As a company operating worldwide with production facilities on different continents, LEONI employs people
from a wide variety of cultural circles. We endeavour to establish a prejudice-free working environment that
does not discriminate against anyone. Corresponding instructions are contained in various policy documents,
such as the Social Charta and the LEONI Code of Ethics, but also in external declarations on principle like the
page 101
Charter of Diversity and the
UN Global Compact, which LEONI has signed.
LEONI promotes the employment of women, who in the past year accounted for 56 percent of the overall
workforce and occupied 23 percent of the management positions. Among other elements, a large number
of flexible, family-friendly, working-time arrangements like part-time, flexitime and trust-based working,
job-sharing and teleworking serve this purpose. In 2012, we organised visits to the Company for Girls’ Day,
which provided girls still at school with information on technical careers at LEONI. LEONI also participated in
the ‘Women in Management Positions’ succession project that aims to promote the careers of female specialist
staff and junior managers.
Training and starting a career
At the end of 2012, LEONI had 155 young apprentices (i.e. similar to the previous year’s number of 156) in Germany. As before, there were 19 mainstream commercial and trade apprenticeship courses on offer, including
Company information
95
for example towards qualifications in industrial and clerical work, electronics engineering, industrial engineering and information technology. These courses were available at eleven facilities, some of which are equipped
with state-of-the-art classrooms and their own training workshops.
Number of apprentices in Germany
171
160
176
156
155
2008
2009
2010
2011
2012
At our key apprenticeship facility in Roth we complement career preparation with the LEONI Junior Group –
a company within a company. It is run by apprentices with full responsibility. The aim is to teach overarching
skills. In 2012 the facility was awarded the ‘Bronze Ace’ of Junior Managers Germany for an exemplary offering
of apprenticeship places. As part of the ‘power (me)’ project of the Bavarian Industry Association, LEONI also
provided young people who had difficulty finding an apprenticeship place with an opportunity and looked
after them closely.
Nineteen young people took advantage in the past financial year of the option of a combined course of
study. This involved, among others, youngsters studying at dual course universities, who completed their practical semester at LEONI. There was also an opportunity in the twin-track course of study including mechanical
engineering to do an industrial mechanic apprenticeship at LEONI. University graduates were able to do a
trainee programme or join the Company directly in certain positions.
In China we set up a Technical Training Center based on the German model at the beginning of 2012, where
our junior employees receive specialist training towards mechanical and electrical qualifications. The training
takes place in a training workshop at our facility and in collaboration with a local college.
Recruiting the next generation
LEONI attaches great importance to recruiting qualified young talent, not only against the backdrop of the
projected shortage of skilled people in Germany. We work closely together with schools and established new
partnerships in 2012 to raise the interest among pupils in LEONI as an employer. LEONI also once again exhibited at such recruitment fairs as the ‘Night of the Future’ and the Bavarian Vocational Training Congress, and
in addition offered youngsters taster internships. During an introductory event potential future apprentices
familiarised themselves more closely with the Company and prospective colleagues for the first time and even
before embarking on a career.
During the year under report, LEONI established initial contact with students at numerous university and
corporate job fairs, involving excursion trips to LEONI facilities and project work with various universities. We
also again promoted highly qualified students in the context of the ‘Scholarship Germany’ programme as well
as with participating teams in various university competitions such as the ‘Automotive Supplier Trophy’, the
‘Elbflorace’ and ‘Formula Student Germany’. University final paper work, internships, student work placements
and casual employment also helped to promote the recognition of LEONI as an appealing employer.
as of 31 December
96
R & D objectives
LEONI conducts intensive research and development (R & D) work to strengthen its power of innovation, one of
the corporate strategy’s four levers. The objective is to develop new products and solutions in order to further
enhance our leading competitive position in many markets as well as to develop additional customer groups.
We also aim to enhance our systems expertise and to become the most innovative provider of cables for environmentally friendly technologies (green technology). A further target involves enhancing the efficiency of our
production processes.
Organisation
The responsibility for R & D work lies in the two business divisions and their corresponding specialist departments. The Wiring Systems Division operates development centres in, among other countries, China, Germany,
France, the United Kingdom, South Korea and the United States; i.e. the markets of greatest importance to
our wiring system business around the world. The WSD head office department in Kitzingen also does basic
research and provides project-related support. In 2012 we extended our know-how in the segment comprising
plugs and connector systems for our new Business Unit Connectivity by taking over the development operaSegment report
page 68
tions of our long-standing partner
FCT electronic GmbH.
In the Wire & Cable Solutions Division, development work is done primarily at the larger facilities in Germany
and Switzerland, but increasingly also in the important markets of Asia and North America. In addition there
is the division’s Research & Development department, which coordinates the work and runs innovation and
Segment report
page 71
application-oriented development projects. Since 2012 this has been allocated to the new
Business Develop-
ment head office department. The ‘Innovation Future Committee’ spanning all of the operations and functions, which, on the basis of a technology roadmap, initiates and monitors investment projects and provides
methods for innovation management, gives additional impetus.
Focal areas of development
The R & D specialists of the two divisions collaborate closely in many areas of work. LEONI can thereby combine
a wide variety of know-how for specific tasks, thus achieving synergies also in the interests of customers. The
focal areas of joint development work in 2012 once again included the search for alternative conductor materials and new solutions for electromobility.
As in the preceding years, the development of customised, project-related wiring systems was also in the
foreground of the Wiring Systems Division’s R & D work. Improving the range of electromechanical components and the new Business Unit Connectivity also played an important role.
The Wire & Cable Solutions Division worked on a large number of customer and market-specific projects,
including expansion of its portfolio of halogen-free cables, miniaturised cables, fiber optic cables and production for high-frequency applications. Apart from the automotive industry, the most important target markets
include medical technology, the capital goods industry and the infrastructure sector.
Company information
97
R & D spending raised by 11 percent
Group-wide spending on research and development increased by more than 11 percent to € 93.6 million in
2012, which equated to 2.5 percent of consolidated sales (previous year: 2.3 percent). At the end of 2012,
1,329 employees (previous year: 1,042), or 2.2 percent of the total workforce (previous year: 2.0 percent),
worked in R & D.
The Wiring Systems Division’s spending in the period under report on R & D rose by more than 16 percent
to € 83.5 million, or 3.8 percent of the division’s sales. Wire & Cable Solutions accounted for spending of
€ 11.4 million (previous year: € 12.2 million), which works out to a 0.7 percent proportion of the division’s sales.
R & D spending
100
€ million
88.3
71.1
75.9
84.1
93.6
2008
2009
2010
2011
2012
80
60
40
20
0
R & D spending as a proportion of consolidated sales
4.0
%
3.0
3.3
2.6
2.3
2.5
2008
2009
2010
2011
2012
3.0
2.0
1.0
0
Group R & D staff
as of 31 December
2008
1,073
2009
1,008
2010
1,116
2011
1,042
2012
1,329
Results of R & D work
Again in 2012, LEONI completed numerous, customer-specific development projects, took products to the
marketability stage and registered proprietary rights. Overall, the Company applied for 26 patents and utility
models (previous year: 18), of which 17 in the Wiring Systems Division and 9 in the Wire & Cable Solutions Division. We made progress especially with green technology applications and in expanding our system business.
HV distributor boxes for e-vehicles launched
Our cross-divisional Business Unit Electromobility expanded its product range in 2012 to include, among other
things, a vehicle-end charging interface for hybrid and electric cars and thereby now covers virtually all of the
particular requirements in terms of connection technology. Together with Continental AG we also developed a
98
high-voltage power distributor for vehicles with electric drive that in 2012 was awarded the innovation prize of
the CNA (Center for Transportation & Logistics Neuer Adler e.V.). This HV distributor box can be set up flexibly
and application-specifically, thereby shortening development times and reducing system costs. It is currently
being tested in a prototype vehicle and is ready for deployment in series production.
Other innovations for the automotive industry
In 2012 LEONI also continued its work on alternative conductor materials to save weight and optimise installation space, and thereby to further reduce the fuel consumption and thus the CO2 emissions of vehicles. With
new, miniaturised data cables for USB and LVDS applications, e.g. for reversing cameras, we underpinned our
leading worldwide position in the field of special automotive cables. In addition, we succeeded in broadening the options to deploy aluminium cables with suitable joining processes. We also extended our range of
cable solutions for harsh environments, i.e. cables that are extremely durable and temperature-resistant, for
example with the high temperature foam developed by LEONI that is exceptionally resistant to oil, petrol, salt
and coolant, but is nevertheless lightweight and flexible. A new, very compact distributor box that, thanks to
its modular construction, boasts a high degree of safety as well as integrated diagnostic and control functions
enhanced our systems expertise.
New system solutions for solar thermal plant and fiber to the home
In the field of renewable energy, LEONI extended its offering in 2012 with a new product line and related services for solar thermal plant. For this purpose we developed suitable instrumentation, low-voltage, bus, optical
and hybrid cables that are matched to the particular requirements of solar power plants. In addition there are
engineering services that contribute to optimising the cost of the plant during the project planning phase.
Also expanded in 2012 was our systems expertise in the future market of fiber to the home: with a fiber optic
splitter that splits the fiber optic cables that reach a building among the individual residential units. Thanks
to an innovative production process based on wafer technology, LEONI is able to manufacture these splitters
especially efficiently and flexibly. We are the first manufacturer anywhere in Europe to run a corresponding
production line. Among others, customers in the Chinese telecommunications industry are currently testing
our prototypes.
More safety in hospitals and public buildings
For the medical technology sector we developed, among other things, an antimicrobial cable that can help to
significantly reduce the risk of infection in hospitals. It makes use of a new acid-based technology that gives
plastics a bacteria-killing effect – rather like the protective shield of acids on human skin. Surfaces that are
treated with this technology very quickly display a significant reduction in bacteria. We already generated
initial sales with these bioactive cables in 2012. LEONI presented another innovation for medical technology
with a miniaturised, round endoscopy cable for the world’s hitherto smallest image sensor.
Given the mounting safety requirements in public buildings like airports, railway stations and office complexes, LEONI also developed a new, flame retardant and simultaneously low-pollutant medium-voltage cable.
BETApower Fireprotec is fireproof for 180 minutes, easy as well as quick to lay and thus simplifies the planning
of supply and power generation plant in new buildings.
Collaboration and promotion of development
Again in 2012, LEONI also worked hard in selected areas of basic research. One of the focal areas here was
also the subject of green technology. Among other things, LEONI participated in the ‘High TEG’ project that
Company information
99
is supported by German Federal Ministry for Education and Research. Here we are working on thermoelectric
generators that use exhaust heat to generate electricity in a vehicle. LEONI is also involved in the ‘FKIA’, ‘Signal
Conductors’ and ‘FALKO’ projects, which are being supported by the Bavarian Research Foundation, the Bavarian Ministry of Economics and the Federal Ministry for Education and Research. ‘FKIA’ involves the development of printing processes to apply conductive channels onto standard plastics. The ‘Signal Conductors’
project aims to develop metallurgical materials and manufacturing processes for signal transmission cables.
‘FALKO’ involves the development of optical switches for high optical performance that are in the future to
conduct laser beams with low input to a choice of various processing stations.
ties. Some know-how was also acquired from the outside in the context of this collaboration, but generally to
an insignificant extent only. The table below shows some interesting collaboration projects:
Collaboration projects with institutions and universities
Project
Partner
Division
High-TEG
The German Aerospace Center (DLR) in Cologne,
Karlsruhe Institute of Technology,
Otto-von-Guericke University in Magdeburg,
the Centre for Applied Energy Research in Würzburg,
Fraunhofer Institute PYCO in Teltow,
Friedrich-Alexander University in Erlangen-Nuremberg,
Georg-Simon-Ohm University in Nuremberg
WSD
FKIA (Functionalisation of plastics by means of
inkjet & aerosol pressure)
Fraunhofer Institute for Reliability and Microintegration in Berlin,
WSD
Elbflorace (race car)
Dresden University of Technology
WSD
Formula Student Germany 2012
University of Applied Sciences in Coburg,
University of Applied Sciences in Würzburg-Schweinfurt,
Dresden University of Technology,
University of Stuttgart
WSD
Metallurgical development of
alternative conductor materials
WCS
High frequency technology / signal processing
Friedrich-Alexander University in Erlangen-Nuremberg
WCS
Innovation management
Friedrich-Alexander University in Erlangen-Nuremberg
WCS
FALKO (Components for multi-kW fiber lasers)
Fraunhofer Institute for Laser Technology in Aachen,
Institute for Photonic Technologies in Jena
WCS
Materials development
Slovakian Technical University Bratislava
WCS
For these and other projects LEONI again in 2012 collaborated with several outside institutions and universi-
100
To exchange ideas on the latest technological trends with other companies, we are, among other things, also
members of the ‘Forschungsvereinigung Räumliche Elektronische Baugruppen’, partners in the ‘Automotive’
and ‘New Materials’ group of Bayern Innovativ, the Bavarian centre for technology transfer, and represented in
various interest groups on the topic of mobility.
Corporate responsibility at LEONI
Group strategy
page 51
The
Strategy of the LEONI Group is geared towards profitable, sustained expansion. In addition to long-term
economic success, LEONI endeavours to strike a balance between social and ecological interests. We refer to
recognised standards as guidelines in this respect and, furthermore, follow various of our own sets of rules.
The external stipulations that we observe in the context of our corporate responsibility are – in addition to
German Corporate Governance Code, the UN Global Compact and the Charta of
report
page 34
legal requirements – the
www.leoni.com
sion-specific guidelines on quality and environmental policy, which can all be viewed on
Diversity. There are also internal sets of rules such as our Social Charta, the LEONI Code of Ethics as well as diviLEONI’s website.
ns
ib i
lit y
soci
al mat ter
s
Co r p o r
ate
Re
sp
o
Corporate Responsibility at LEONI
ec
my
gy
olo
e cono
sustainability
We have established management systems for compliance, quality, the environment as well as occupational
health and safety to implement these requirements and to systematically improve our orientation towards
sustainability. The section below provides information on the status quo and the key developments in the area
Risk and Opportunity
report
page 112
of sustainability in 2012. The
Risk and Opportunity report contains information on compliance.
Company information
101
UN Global Compact
LEONI has been a member of the UN Global Compact, a worldwide initiative under the auspices of the United
Nations, since 2011. Its members commit themselves to gearing their work processes and strategies towards
ten universally accepted principles pertaining to human rights and labour law, environmental protection as
well as combating corruption and to support pursuit of the associated objectives. Each participant commits
to report once a year on their progress towards fulfilment of these ten principles. We published this annual
Communication on Progress (COP) for the first time in July 2012. The next publication will probably follow in
July 2013. Our current United Nations Global Company Communication on Progress may be accessed on our
website. The
Global Compact Index in this Annual Report also provides an overview of our activity and
shows that our internal standards already largely cover the above principles.
www.leoni.com
Global Compact Index
page 220
Reliability and a high quality of our products, services and processes are on the one hand key to our success in
the marketplace and on the other hand integral elements of our commercial responsibility. That is why LEONI
continues to work on improving the efficiency of its QM systems. In 2012 work started in the Wiring Systems
Division on combining the activity involving quality management, the SHE (Safety, Health, Environment)
policy and the LPSplus productivity system in an integrated management system to enhance efficiency and
provide synergies. In our Wire & Cable Solutions Division we analysed, standardised and optimised the quality
management processes in the context of an overarching business-process harmonisation project.
Certain focal topics were tested and improved by internal audits throughout the Wiring Systems Division in
2012 to raise quality. This reduced the complaint rate from 61 ppm (parts per million) in 2011 to 24 ppm in the
year under report. Numerous, individual quality improvement measures were also applied at the facilities and
in the business units of the Wire & Cable Solutions Division in 2012.
Certifications and customers awards
Certification to domestic and international standards underpins the focus on quality in both divisions. In the
Wiring Systems Division, all plants are certified to the ISO/TS 16949 automotive industry standard and successfully passed the repeat audits that were due. In addition there are customer-specific audits for particular facilities and projects. In the Wire & Cable Solutions Division, 49 of the 50 companies, or 98 percent, are certified to
the ISO 9001 quality standard, while eleven plants are also certified to the ISO/TS 16949 standard, three to the
ISO 13485 medical devices standard and two to the EN 9100 aerospace standard.
Quality Management
102
Various awards from customers in 2012 also underscored the high quality of our products and our dependability as a partner:
2012 awards
Award
Customer, award presenter
Division
Location
Core Supplier
PSA Peugeot Citroën
WSD
facilities in France, Morocco, Romania,
Russia and Tunisia
Bavarian Quality Award
Bavarian State Government
WCS
LEONI Kabel GmbH,
Germany
Best Key Account
Siemens
(Motion Control unit)
WCS
BU Industrial Solutions,
Germany
Green Supplier of the Year
Yazaki
WCS
LEONI Cable S.A. de C.V.,
Mexico
GM Supplier Quality Excellence Award
General Motors
WSD
BU Suppliers International
facility in Trencin, Slovakia
Best Molex de México Manufacturer
Molex de México
WCS
LEONI Cable S.A. de C.V.,
Mexico
Staff and social matters
Our employees are a crucial factor for LEONI’s sustained expansion. We regard successful recruitment, basic
ensuring equal rights as key indica-
Employees
page 94
and advanced training of staff, provision of attractive jobs as well as
Occupational health
and safety
page 103
internationalisation with production facilities around the world, LEONI considers social responsibility to be an
tors for sustainability; likewise healthy and
safe working conditions. Against the backdrop of increasing
elementary part of good corporate governance. We have therefore been committing ourselves ever since 2003
in a ‘Declaration on Social Rights and Industrial Relations’ (Social Charta) to ensuring human rights and fundamental employee protection rights at all of our locations. In so doing, LEONI adheres globally to the requirements of the International Labour Office (ILO) of the United Nations. Adherence to these standards is regularly
reviewed at all of our facilities worldwide by our internal auditing.
We also encourage our business partners to match our standards. LEONI’s general purchasing conditions
oblige suppliers to observe our Social Charta and the Code of Ethics. Breaches of the principles stipulated
therein entitle LEONI to terminate the supply relationship immediately. Since 2012 it has been possible to
replace these individual rules by joining the UN Global Compact.
In social terms, LEONI commits itself with donations for and sponsorship of various projects and institutions. We devised and implemented a sponsorship plan in 2012 to organise our activity in this respect. As
planned, much of the support flowed into social projects. To a lesser extent there were in addition contributions to culture, education and science as well as sport. The largest single donation during the year under
report went to UNESCO’s ‘Education of Children in Need’ programme.
Occupational safety, health, environmental protection
At the beginning of 2012, both of our divisions adopted the principles of occupational safety, health and environmental protection (SHE; Safety, Health, Environment). These can be viewed on our
website. The objec-
www.leoni.com
Company information
103
tives we are thereby pursuing include, on the one hand, avoiding accidents at work and work-related illnesses
as well as, on the other hand, reducing our environmental impact. It is also part of our SHE policy to encourage
our business partners to conduct themselves according to the same standards as we do.
The management systems for effective implementation of these principles were improved in our business
divisions during the year under report. The SHE management system in the Wiring Systems Division was
extended with four standards covering hazardous substances, electrical safety, protective equipment and aspects pertinent to the environment. We also started to prepare a standard on medical care. In the environmental and energy management of the Wire & Cable Solutions Division, the staffing of which we increased in the
and introduced a harmonised method for determining and assessing environmental aspects.
Occupational health and safety
In 2012, LEONI stepped up its preventive corporate health management scheme, for instance with days of
action and individual measures in the Wiring Systems Division. We increased the number of people trained in
first aid and schooled them in the use of semi-automatic defibrillators to be able to help quickly and with skill
in a medical emergency. Improving fire protection was another focal area. All facilities of the Wiring Systems
Division are equipped with fire detectors and warning systems; in addition they carried out numerous fire
safety drills. We started at WSD’s headquarter in Kitzingen with the development of a new office design to
optimise the working conditions for our staff in terms of office ergonomics. The success of our stepped-up
activity for occupational health and safety is reflected by the diminishing number of work-related accidents in
the Wiring Systems Division: having already dropped by about 22 percent in 2011, the number was down again
in 2012 despite a substantial increase in the number of staff.
Environmental protection activity
We are working on reducing our ecological footprint with numerous measures in all areas of our Group. For
example, via its Group-wide Travel Management, LEONI in 2012 again participated in Deutsche Bahn’s Eco
Programme. As in the previous year, we thereby ensured that the train journeys of our employees on business
trips were CO2 free because the Deutsche Bahn obtains the power required for this from renewable energy
sources. In the plant and equipment-intensive Wire & Cable Solutions Division, an overarching environmental
target for all large facilities was, in addition to the individual environmental and energy targets of all certified
plants, prescribed for the first time in 2012 together with implementation of corresponding projects. These
resulted, among other things, in savings and efficiency increases in lighting systems, in the standby running
of production lines, compressed air generation, ventilation and air-conditioning as well as the cooling water
pumps at facilities in China, Germany, the United Kingdom, Mexico and Slovakia. At our plant in Roth, for
example, the use of energy in parts of the production area was reduced by up to 70 percent thanks to more efficient lighting. At our plant in Changzhou, China, we achieved significant energy savings based on revolutiongoverned compressors for generating compressed air, and at our UK facility we optimised the filter systems for
the wire drawing line, thereby significantly reducing water consumption.
previous year, we localised more areas of work to improve energy efficiency, initiated corresponding projects
104
Energy consumption and CO2 emissions reduced
As part of its UN Global Compact Communication on Progress (COP), LEONI has since 2012 made public the
trend in its Group-wide energy use and CO2 emissions. We regard both of these figures as key indicators for
sustainability. The figures available by the date of the Management Report refer to 2011: energy consumption
in that year rose by significantly less than the amount of business and was thus reduced by 15 percent relative
to sales. The increase in CO2 emissions was also quite small in proportion, coming down to 14 percent per
€ 1 million in sales. Per employee, on the other hand, the figure was almost 4 percent up on the previous year.
The data for 2012 will be available at the end of March 2013 and will be made public in the next COP.
Energy consumption in the Group
MWh / sales in € million
2009
139.8
2010
114.6
2011
99.8
Group-wide, direct CO2 emissions
t per € 1 million of sales
t per employee
54.1
48.0
55.1
51.9
45.3
3.5
2.8
2.4
2.8
2.9
2007
2008
2009
2010
2011
Carbon Disclosure Project
LEONI participated in the Carbon Disclosure Project for the fifth time in 2012. On behalf of institutional investors, the initiative surveys the world’s largest, market-listed companies on the amount of their CO2 emissions,
among other things. The 2011 figures were collected during the year under report. Compared with other
companies in the automotive sector and other industries that participated in the Carbon Disclosure Project,
LEONI’s figures were better than average measured both as a proportion of sales and relative to the number of
employees.
Certification to environmental and occupational safety standards
LEONI’s high SHE standards are continually reviewed by internal audits and external certification to international standards. During the year under report, 45 percent of the WSD facilities worldwide were certified to the
ISO 14001 environmental standard or the EU’s Eco-Management and Audit Scheme (EMAS) while 11 percent
were certified to the OSHAS 18001 Occupation Health and Safety Assessment Series standard. A total of five
facilities were newly certified; among them also the headquarter in Kitzingen (ISO 14001). There were also
twelve internal audits at facilities in Asia, Europe and North Africa as well as external audits, for instance in the
Company information
105
context of fire safety inspections by insurance companies. In the Wire & Cable Solutions Division, 44 percent of
the organisational units were certified to the ISO 14001 environmental standard, and three also to EMAS. The
LEONI Kerpen facility in Stolberg underwent EMAS validation for the first time in 2012.
Green Technology
It is a key part of our strategy with our portfolio of products and solutions as well as our technology expertise to tap the potential of future markets for sustainable, energy-saving and environmentally compatible
applications and thereby also for ourselves to promote the use of environmentally friendly materials as well
as to improve our value chain from ecological aspects. LEONI summarises these effect under the term ‘green
technology’. Our activity in this respect is measured by the criteria of application, product and process.
■■
Application: Expanding our range of products and solutions that are used directly in green markets and
technologies or serve as input products or components for green applications
Product: Increasing the proportion of low-emission, environmentally compatible raw materials in our cable
■■
products as well as raising the ability to recycle the processed materials and components
■■
Process: Optimising resource efficiency in our manufacturing processes by deploying energy-efficient
machinery and heat recovery measures. Certifying more facilities in our global production network to the
ISO 14001 environmental standard
Sales of green technology steady
In fiscal 2012, our Group-wide sales of products and solutions for green technology were, at € 222.6 million,
roughly at the previous year’s level. Above all, this reflected the cyclical project business in the field comprising sustainable mobility applications, which was down slightly after a very good year in 2011. In the past three
years LEONI increased – starting from a low base – the size of its business involving green technology applications by an annual average of 29 percent and thereby also outpaced the growth in the global market for
environment technology and resource efficiency. According to a study by the German Federal Ministry for the
Environment (BMU), the market grew at an average annual rate of 12 percent between 2007 and 2010.
Sales involving applications for green technology
28.8
Wiring Systems
€ million
79.4
108.2
2009
41.3
126.8
168.1
2010
87.2
135.9
223.1
2011
98.9
123.7
222.6
2012
New products for green technology
LEONI expanded its portfolio of green technology products further in 2012; for example to include a product
range and related services for solar thermal plant and a high-voltage distributor box for electric and hybrid
vehicles. Details concerning new developments in 2012 may be found in the section headed
Development.
Research &
page 97
106
LEONI already serves all of the most significant markets for environmental technologies as defined by the BMU,
and is very well positioned in many of these sectors. The table below provides an overview of our fields of application for green technology:
Market segment
Examples of applications for LEONI products
Environmentally-friendly energy
generation and storage
Energy efficiency
Solar energy (e.g. photovoltaic and solar thermal plants)
Bioenergy (e.g. biogas and biomass power plants)
Hydro power (e.g. tidal and pumped storage power plants)
Efficiency of raw and other materials
Recycling management
Sustainable water management
Sustainable mobility
Energy consumption-lowering measurement and control technology
Energy efficient automotive and drive technology
Measuring and control technology to avoid scrap
Lightweight materials and components
Waste separation and disposal plants
Recycling (plastics recycling plants)
Water treatment, distribution, supply and cleaning plants
Household appliances with high water consumption efficiency
Vehicles with hybrid, electric and fuel cell power
Charging cables and infrastructure
Rolling stock engineering
Focal markets
Energy efficient manufacturing processes
Group-wide, our sales of products that are made in environmentally certified facilities or using energy efficient
plant and machinery increased from € 2,972.4 million to € 3,128.5 million in 2012. Of that figure, € 1,164.5 million pertained to the Wire & Cable Solutions Division (previous year: € 1,234.3 million) and € 1,964.0 million to
the Wiring Systems Division (previous year: € 1,738.1 million).
Membership in the Desertec consortium
In July 2012, LEONI joined the Desertec Dii consortium as an associated partner. The objective of this industry initiative is by 2050 to establish a sustainable, reliable and affordable electricity supply system based on
renewable energy for the EUMENA (Europe, Middle East and North Africa) region. Our products and services
for solar thermal and photovoltaic plant are to contribute to raising the efficiency of the power plants of this
desert electricity project.
Disclosures pursuant to Art. 315 (4) of the
German Commercial Code
Company information
107
Composition of the share capital: The share capital in LEONI AG is divided into 32,669,000 registered no-parvalue shares. All shares are subject to the same rights and obligations. Each share provides one vote at the
Annual General Meeting and is key to the shareholders’ share of the profit.
Constraints concerning the voting rights or the transfer of shares: We are not aware of any constraints
affecting voting rights. Transfer constraints exist in so far as shares that members of the management and
executives receive or have received in the context of a long-term incentive programme are subject to a holding period. With respect to LEONI AG, Article 67 (2) sentence 1 of the German Public Companies Act defines as
Article 135 of the German Public Companies Act (AktG), apply to the exercise of voting rights by shareholder
associations as well as by financial institutions and persons otherwise granted proxy.
LEONI AG is not aware of any shareholdings, either direct or indirect, that exceed 10 percent of the voting
rights.
Nor are there any shares with special entitlements that grant control rights.
The control of voting rights in the case of shareholding employees who do not directly exercise their
control rights: So far as employees are shareholders, they are entitled to directly exercise the control rights
associated with their shares in accordance with the Articles of Association and the law.
Statutory provisions and rules in the Articles of Association on the appointment and recall of members
of the Management Board and on changes to the Articles of Association: The appointment and recall of
management board members is governed by Articles 84 and 85 of the German Public Companies Act as well
as in Article 31 of Germany’s Co-determination Act. Accordingly, the Supervisory Board appoints members
to the Management Board for a maximum of five years. Pursuant to Article 5 (1) of the Articles of Association,
the Management Board has at least two members. Furthermore, pursuant to Article 5 (2) of the Articles of
Association, the Supervisory Board appoints the Management Board members and determines their number. It is entitled to appoint deputy members of the Management Board as well as a chairman and a deputy
chairman of the Management Board. Article 179 of the Public Companies Act stipulates that amendments to
the Articles of Association require a shareholder resolution at the Annual General Meeting. Article 16 (3) of the
Articles of Association stipulates that a simple majority of votes and a simple majority of shares is required for
any amendment to said Articles of Association unless a different majority is bindingly required by law or by the
Articles of Association. Pursuant to Article 19 of the Articles of Association, the Supervisory Board is entitled to
adopt amendments and additions to the Articles of Association that pertain only to the version. Furthermore,
the Supervisory Board is authorised pursuant to Art. 4 (5) subsection 4 of the Articles of Association to amend
the version of the Articles of Association in line with exercise of an increase in share capital by utilisation of
authorised capital after expiry of the term of authorisation. Article 4 (6) subsection 2 of the Articles of Association also entitles the Board to amend the Articles of Association in line with the respective utilisation of the
contingent capital. The same shall apply in the event of non-utilisation of the authorisation to issue convertible
bonds and/or warrant-linked bonds following the expiry of the authorisation period and in the event of the
non-utilisation of the contingent capital I following the expiry of all conversion and/or option periods.
shareholders only those persons or entities entered in the share register. Legal requirements, especially under
108
Powers of the Management Board to issue or buy back shares:
Purchase of the Company’s own shares - At the Annual General Meeting on 6 May 2010 shareholders authorised the Management Board of LEONI AG pursuant to Article 71 (1) section 8 of the Public Companies Act to
acquire up to 2,970,000 shares in the Company until 5 May 2015. The purchase may also take place through
group companies that are dependent on the Company, or by third parties on their or the latter’s account. Such
a purchase may be transacted via the stock market or by means of a public offer or a public invitation to all
shareholders to submit offers to sell. The Management Board is authorised in accordance with the aforementioned resolution to use the Company shares acquired on the basis of this or a previous authorisation for all
legally permitted purposes, including in particular those stated in the authorisation. The statutory right of
shareholders to subscribe to own shares shall be excluded insofar as the shares are used in accordance with
the purposes specified in the authorisation.
Authorised capital – Shareholders at the Annual General Meeting on 16 May 2012 authorised the Management
Board to increase the Company’s share capital by up to € 16,334,500.00 on or before 15 May 2017 with the
Supervisory Board’s approval by issuing up to 16,334,500 bearer shares, each with a pro-rated share of € 1.00
in the share capital, on a cash or non-cash basis once or repeatedly (authorised capital 2012). Shareholders
must in the process and as a matter of principle be granted the right to subscribe, however the Annual General
Meeting authorised the Management Board, with the Supervisory Board’s approval, to rule out shareholders’
subscription rights in certain cases.
Contingent capital – Furthermore, the Management Board is authorised pursuant to Article 4 (6) of the
Articles of Association to issue convertible bonds and/or warrant-linked bonds until 5 May 2015. This involved
a contingent increase in share capital by up to € 14.85 million. The contingent capital increase is only to be
performed to the extent that conversion and/or option rights have been utilised or that the holders and/or
creditors obliged to convert have met their conversion obligation and provided that no cash settlement has
been granted or Company shares or new shares from the utilisation of approved capital are utilised for the
exercise of rights.
Agreements of the Company that are conditional upon a change of control as a result of a takeover bid: In
the event of a change of control as a result of a takeover bid, the corporate bond issued in 2006 in the amount
of € 200 million, the borrower’s note loans issued in 2008 in the total amount of € 50.5 million, the borrower’s
note loan placed in 2012 in the amount of € 250 million as well as other loan agreements may be called in immediately. Furthermore, in such an event some of the major customers, suppliers as well as other joint venture
partners also have the right to terminate contractual agreements with the Company prematurely.
LEONI AG agreements for the event of a takeover bid that would provide members of the Management
Board or staff with compensation: The service contracts of the Management Board members include a
change-of-control clause. Each Management Board member is thereby entitled, in the event of a change of
control, to extraordinary termination as well as to a settlement claim within three months. The settlement
comprises the balance of annual compensation to the end of the term of the contract and is, in accordance
with Section 4.2.3 (4) and (5) of the German Corporate Governance Code, limited to a maximum three years’
compensation, or, if the remaining contract period is less than three years, to the sum outstanding for such remaining period. The annual compensation comprises the fixed annual salary and 80 percent of the maximum
attainable bonus.
There were no events of special significance and with material impact on the LEONI Group’s earnings, financial
Company information
109
and asset situation occurring after close of the financial year and until this report was signed.
Risk policy
Opportunities and risks are an integral part of all business activity and therefore also of LEONI’s activity with
a global outlook. Our risk policy follows the principle of accepting risks only when the associated business
the Management Board, determines the activity of every person involved in the process of risk management.
As a general rule, risks and opportunities are defined at LEONI as deviation from the planned result.
Risk management system
LEONI has a multi-stage risk management system as well as other, supporting control systems for early identification of risks that might threaten the Company’s continued existence. This Group-wide system
encompasses the corporate risk manager and two area risk managers as well as about 190 managers involved
in the operations of all relevant business areas. A unit that reports directly to the Management Board is in
charge of monitoring and coordinating the risk management process at head office. It also determines and
describes the Group’s overall risk situation. Immediate responsibility for early recognition, control and communication of the risks rests with the managers in operations. Based on the information provided by them, the
risk management and controlling of the business divisions prepares quarterly reports, which the corporate
risk manager compiles and presents per quarter during a meeting of the Management Board. He or she also
ensures that the Management Board and the Supervisory Board are informed of key changes in the risk situation without delay.
transaction can be expected to make an appropriate contribution to enterprise value. This risk policy, as set by
110
Risk management system
Supervisory Board
Management Board
Corporate Internal Control Committee
Operational Manager
+
Corporate Risk Management Committee
Responsibility for Risk / Internal Control System / Compliance
+
Corporate Compliance Committee
Risk / Internal Control System / Compliance Manager
Central functions
Wiring Systems
Division
Public Auditors
Division
Internal Revision
Apart from the reporting, risk workshops are held once a year during which the inventory of risks of the divisions and of the Group is updated, a training session is held and the likely range of fluctuation in market risks is
estimated for the aggregate statement. We run these risk workshops for the divisions and for the LEONI Group.
Prior to these events, the corporate risk manager and the responsible area risk managers conduct separate
interviews with the operations managers for each business group/unit of the two divisions.
On the Corporate Risk Management Committee, the legal, internal audit, finance, insurance and tax
departments exchange information with the risk managers of the divisions. Process improvements for the risk
management system are also on the agenda for meetings of this committee. All risks that we cannot prevent
or pass on, as well as the measures to counteract them, are recorded on a workflow-supported database.
The risk reporting, risk workshops and workflow-supported database ensure that existing risks are identified, monitored and controlled as well as being systematically reduced by the countermeasures applied. Risk
management is based on the maximum amount of potential claims. Risk management is also integrated in
the existing planning, controlling as well as information systems and covers all companies in the LEONI Group
worldwide. The Group-wide internal control system and the compliance management system also complement the risk management system.
Internal control and risk management system with respect to the accounting process
Pursuant to Article 315 (5) of the German Commercial Code, LEONI is obliged to describe its internal control
and risk management system with respect to the accounting process. This system is not legally defined. LEONI
Company information
111
understands it as a comprehensive system in line with the definitions of the Institute of Public Auditors. Accordingly, an internal control system is understood to mean the principles, methods and measures introduced
by the Company’s management, which are directed towards organisational implementation of management’s
decisions
■■
to ensure the effectiveness and profitability of the business activity (which also involves the protection of
on the correctness and reliability of both internal and external accounting as well as
■■
on adherence to the legal requirements material to the Company.
The risk management system comprises the totality of all organisational rules and measures to indentify risk
and for dealing with the risks associated with entrepreneurial activity.
With respect to the Group accounting process, the following structures and processes have been implemented in the Group: The Management Board bears overall responsibility for the internal control and risk
management system with respect to the accounting process in the Group. All strategic business segments and
units are bound by a firmly defined management and reporting organisation. The principles, the operational
and organisational structure as well as the processes of the accounting-related internal control and risk management system are laid down in a handbook that is updated at regular intervals to include the latest external
and in-house developments.
With respect to the accounting process we deem such features of the internal control and risk management
system to be significant that could materially influence the accounting and overall information provided in the
financial statements and consolidated financial statements including the management report and the group
management report. In particular, this involves the following elements:
■■
identification of key areas of risk and control of relevance to the accounting process;
■■
monitoring controls for supervising the accounting process and their findings at the level of the Management Board and of the strategic business areas;
■■
preventive control measures in financial management and accounting as well as in operating performancerelated business processes, the principal information for preparing the financial statements and consolidated financial statements including the management report and the group management report, including
function separation and predefined approval processes in relevant units;
■■
measures that ensure proper IT-supported processing of accounting-related facts and data;
■■
measures for monitoring the accounting-related internal control and risk management system.
The operational and organisational structure of the internal control system is, at LEONI, divided into four
local control levels (corporate departments, divisions, business groups/units and local companies) and a corporate documentation level, which is integrated in the risk management system. The locally executed manual
and IT-supported controls are documented in risk management at the corporate level as part of a control
self-assessment process.
assets, including the prevention or disclosure of asset misappropriation),
■■
112
Our control processes are not limited to just accounting-related risks, but also encompass operating and compliance controls that might constitute a risk for the LEONI Group. The Corporate Internal Control Committee,
which is composed of the persons responsible for control at the respective head offices and the Control Level
Managers, carries out audits of all control matters and processes involving the internal control system with
respect to being up to date, complete and effective. The Control Level Managers support the process and the
persons responsible for control.
The Audit Committee reviews the internal control system’s effectiveness once a year. This may involve the
auditors presenting weaknesses in the internal control system found during the annual audit. Furthermore, the
Internal Audit department checks on a random basis whether the internal controls at the four business levels
are being carried out.
In 2012 LEONI commissioned an external audit on implementing the legal requirements to have an operational and accounting-related control system that is fit for purpose. The audit finding was positive without
qualification.
Compliance management system
The corporate compliance management system is geared towards prevention in the principal fields of compliance in order to adhere to legal requirements and the Company’s own guidelines. The principal compliance
fields include: competition law, export control, prevention of corruption / Code of Ethics / Social Charta, the
Tread Act (duty to report recalls to the US authorities), information security / data protection, taxes and capital
market law (BaFin). The persons responsible for risk management are also responsible for compliance. There is
also quarterly compliance reporting in line with the risk reporting.
Each of the seven aforementioned compliance fields has one compliance field manager in charge. The compliance field managers meet quarterly on the Corporate Compliance Committee and also serve to ensure that
our compliance control system is continually improved.
To further underscore the LEONI Code of Ethics, Social Charta and anti-corruption compliance fields, LEONI
joined the United Nations Global Compact in 2011. The objective is for this compliance standard also to be applied externally vis-à-vis our customers and suppliers. Further information on this is contained in the
page 102
Global Compact Index
page 220
Sustainability report as well as in the
UN Global Compact Index.
It is the duty of the compliance field managers to update the internal guidelines and to convey this in annual
training sessions. Furthermore, as experts they are the contacts with respect to all questions arising about
their compliance field.
All operational managers and pertinent staff worldwide regularly participate in training courses on compliance. In 2012 there were e-learning training courses on the compliance fields of Code of Ethics / Social Charta
/ UN Global Compact, competition law, export control, capital market law and data protection. For 2013 we
are planning e-learning courses on the compliance fields of information security, prevention of corruption,
product liability and the General Equal Treatment Act (AGG). We currently teach up to 12,000 employees in up
to seven languages (Arabic, Chinese, German, English, French, Spanish and Russian).
Automated compliance audits by means of self-checks and a personal undertaking to be submitted by each
manager on an annual basis provide compliance with an additional safeguard. The scope of our self-check is
determined in consultation with the compliance manager. The status of checks is presented and other process
improvements are agreed on the Corporate Compliance Committees.
Potential for improvement found in the 2011 external audit concerning the structure, appropriateness and
effectiveness of compliance at LEONI according to the new ‘IDW PS 980 Principles of proper auditing of compliance management systems’ auditing standard was implemented in 2012.
Company information
113
Integrated opportunity management
The identification, awareness and exploitation of opportunities of the LEONI Group is managed on a decentralised basis under operations management. Forming the basis for this is the target agreement and strategy process originating from the Management Board. Outside forecasts and market analyses also support opportunity
management. It is integrated in the risk management and controlling process at the respective business unit
/ group levels as well as in the principal projects of the Wiring Systems Division. The findings are documented
by our operational managers on the basis of a risk/opportunity comparison and condensed for the ManageMonte Carlo simulation.
The Wiring Systems Division understands opportunity management to be a balanced combination of expanding its core business, identifying new markets and targeted extending of the depth of added value. In so
doing, the division builds on existing strengths and aims to continuously improve along the entire value chain.
In addition, the division continuously analyses new collaboration options and technological trends to be able
to generate lastingly profitable growth.
The Wire & Cable Solutions Division’s opportunity management pursues product and market-specific opportunities in the context of strategy-related work. For example, the global trends of importance to LEONI are
monitored, evaluated for each of the division’s business units and checked for expansion potential as well as
risks. Directions of growth and suitable innovation, acquisition and sales-increasing projects are extrapolated
from this process.
Presentation of individual risks
The material risks that we monitor are described hereinafter according to the risk classes strategic risks and
market risks, operational risks, financial risks and compliance risks.
Strategic risks and market risks
Cyclical fluctuation / loss of a customer – Customers in the automotive industry and among its suppliers
account for about 75 percent of LEONI’s consolidated sales. The current business performance of this sector
therefore has great influence on LEONI’s business volume and earnings. LEONI has prepared for any cyclical
slump in sales by making its structures even more flexible. The Wiring Systems Division reduced the risks
arising from exposure to a small number of major customers by having a broader customer base. Loss of a
customer could nevertheless have a larger impact, although there would be a fairly long lead-time before
the effect sets in because of the lengthy contract periods covering a particular model range. We endeavour
to prevent such loss by establishing very close and stable relationships with our customers. This is based on
extensive development work and outstanding service in terms of delivery. There is still no reason to anticipate
the complete loss of a customer from the automotive industry without the model ranges for which we supply
product being continued.
ment Board and the Supervisory Board in an aggregate statement, for which we make use of what is known as
114
Price risks – We confront the persistently heavy pressure on prices in the automotive industry with effective,
stringent cost management in all areas of our Company, setting up more production facilities in low-wage
countries and resolutely optimising purchasing prices, which we also carefully monitor. The trend prevailing
in the automotive industry towards sharing development costs with suppliers also continues to affect LEONI.
In both development projects and series production we therefore rely, together with our customers and our
sub-suppliers, on thorough and comprehensive quality control and certification routines.
Facility outage risks – The LEONI Group had a total of 92 facilities in 32 countries in 2012. Policy on choice of
location is geared closely to the requirements of our customers, which LEONI follows into foreign markets. It
would not be possible to immediately replace the production capacity of large facilities with up to 8,000 employees in the event of an outage. Just-in-time delivery, the single-source principle of some customers and the
use of customised cable harnesses extend this risk further. Owing to the size it has attained, LEONI operates
a considerable number of production facilities worldwide, which have backup capacity as is prudent and accepted by the carmakers. Furthermore, preventive measures have been applied at all production facilities and
are documented in a global emergency plan. These range from a round-the-clock guard service to extensive
fire protection systems. Furthermore, no LEONI facility is located in an area known to be under serious threat
of earthquakes, flooding or other natural disasters. A facility outage could nevertheless trigger a supply bottleneck of several weeks.
Unrest in North Africa – The constant pressure on prices and costs compels us towards disproportionately
large increases in production capacity located in low-wage countries. This means that buyers and customers
in many instances have to be supplied across several national boundaries. There are also political risks in some
countries. The difficult political situation in Tunisia and Egypt is repeatedly leading to unrest and also to strikes
at our production facilities in these countries. The risk of production and transport disruption, for instance
involving closed seaports or airports, cannot be ruled out during political unrest. The option of temporary
supply from production facilities in other, non-affected countries is severely limited because of the customised
products in the Wiring Systems Division. Relocation is possible only with a corresponding lead time necessitated by setting up the required production capacity and recruitment. That is why we offer our customers the
option of supply from two facilities in different countries. In many cases, however, our customers have decided
for economic reasons to continue to share the risk of 100 percent supply from North Africa.
Start-up and project risks – The current expansion of our production capacity for new model ranges is
progressing according to plan. Should we fail to ensure that production starts up on schedule and according
to the requirements of our customers this could have serious consequences for future business. We are aware
of the importance of such projects to our own success and monitor the preparations carefully to ensure onschedule progress.
Copper price risk – LEONI uses copper in all of its business segments. The global market price of this raw
material, which is subject to substantial fluctuation, therefore exerts a major influence on the cost of materials in the Group. This pronounced volatility can largely be passed on to our customers based on contractual
agreements to this effect – normally after a time lag. If the price of copper rises for a protracted period of time,
this time lag can exert an adverse effect on the reporting date. If the price has fallen sharply up to the report-
ing date, copper inventories may be exposed to the risk of devaluation. The second large group of materials
that is used in the LEONI Group, mainly in the Wiring Systems division, comprises bonding systems consisting
of plastic casings and metal contacts. These almost exclusively involve tool-specific components, which are
Company information
115
mostly procured from a single supplier because of customer specifications or for commercial reasons. The
ongoing rise in demand has led to increases in the cost of raw materials that are of greatest importance to us.
This can result in demands for higher prices and therefore in increased procurement costs for the corresponding components, and can furthermore in the future cause supply bottlenecks in the case of shortages. So far
we have been able to largely avoid this based on our long-term supplier relationships.
Operational risks
nel and the resulting rise in wage and salary costs at labour-intensive production locations in Eastern Europe
present human resource management with particular challenges. This situation is brought about by the large
number of production operations being located in eastern European countries with low wage levels. Effort has
been stepped up to increase staff advancement – for example with internal programmes to provide employees with further qualifications and aimed at integration as well as offering a wide range of social benefits – to
maintain the ability to recruit and tie staff as an attractive employer.
For our travelling and seconded staff members we have enhanced an existing care insurance policy to
include further medical and security-relevant benefits. For example, evacuation in the event of unrest as in
North Africa or a natural disaster would be handled by an international service provider.
IT risks / cybercrime – Running a company like LEONI that operates on a global scale is only possible with the
help of sophisticated IT systems. Constant readiness to supply goods and services – especially to the automotive industry that frequently calls for either just-in-time or just-in-sequence delivery – also depends on the
availability of IT systems and their data at all times. Serious disruption such as system outages or loss of data
could threaten LEONI’s ability to supply, temporarily stop customers’ production and hence result in facing
far-reaching claims for compensation. LEONI therefore constantly works – in some instances with the support
of outside specialists – at optimising its IT set-up, both in terms of concept and operation. One example of this
is having a second, backup computer centre as an emergency system.
An Information Security and Data Protection Officer reporting directly to the Management Board demonstrates the very high priority given to security of our information systems and networks, as well as to safeguarding the confidentiality, availability and dependability of our data. Attacks on our networks, the loss or
manipulation of data could result in a temporary comprising of our ability to supply.
Financial risks
To back our plans for growth and the capital expenditure it entails, LEONI has received ample short and longterm loan commitments from banks, mainly in the form of conventional lines of credit. In addition, stringent
cash pooling is used to safeguard liquidity. The most important cash flows in the Group are managed and
handled by LEONI AG at head office. Our successful sale of LEONI Studer Hard AG at a net price of about
€ 48 million and placement of a borrower’s note loan in the amount of € 250 million improved our financial
base substantially in 2012.
Personnel – The growing shortage of skilled professionals in Germany, changes in the availability of person-
116
Risk of bad debt losses – All customers with whom the LEONI Group intends to conclude business on a credit
basis are subject to credit screening. Regular analysis of receivables and the structure of the receivables facilitates ongoing monitoring of the risk. Accounts receivable management is organised in a decentralised way
but is controlled by the head office, which sets conditions by means of the existing guideline for Group-wide
accounts receivable management.
The insured subsidiaries must apply for credit insurance limits to the credit insurer for all receivables from
customers that are not exempt from compulsory cover and that exceed € 50 k. Internal credit limits are set for
major customers that are exempt from mandatory cover and other non-insured customers. Limits are applied
for without delay and are monitored by head office’s accounts receivable management.
Factoring, or true sale factoring for selected customers, serves as a further tool to reduce the risk of default.
Customers with good credit ratings are also included.
Liquidity risks – The Group monitors its current liquidity situation on a daily basis. Monthly, currency-specific,
rolling liquidity planning for respective periods of 12 months is used to manage future liquidity requirement.
The planning takes into consideration the terms of investments and financial assets (e.g. receivables, other
financial assets) as well as the expected cash flows from business activity. In addition, we analyse our existing
finance based on our medium-term planning, which we revise annually. We initiate suitable measures in good
time so far as there is any change in borrowing requirement. The Group’s objective is to ensure funding in the
respectively required currency at all times.
Impairment risks – LEONI subjects assets and/or goodwill to impairment testing based on the IFRS accounting rules. An increase in the discount rate and/or worsening of earning prospects will cause the risk of impairment to rise.
Interest rate and currency risks – For most of the variable-interest loan obligations, we generally use underlying instruments like caps, swaps and collars to avoid the risk of changes in interest rates. Such contracts are
signed exclusively by LEONI AG.
Although we conduct business mainly in euros or in the local currency of the respective country, we are
increasingly faced with currency risks due to the globalisation of the markets. In the Group’s holding company,
LEONI AG, the Corporate Finance department deals with the resulting currency risks in collaboration with and
based on the conditions set by the currency committee with respect to limits and terms. Hedging transactions
are executed in line with the existing underlying transactions or the planned transactions.
Selection of the hedging instrument to be used is based on regular, in-depth analysis of the underlying
transaction to be hedged. The objective is to limit the impact of exchange rate variation on net income. Apart
from the actual hedging transactions, we primarily take advantage of the option of netting foreign currency
items within the Group to hedge our operating business activity. As a further currency-hedging measure, as
a matter of principle we finance our foreign subsidiaries in their respective functional currencies by way of
refinancing in the corresponding currency.
Company information
117
The currency hedging transactions, as well as our interest rate hedging transactions, were signed with first rate
commercial banks, meaning that there was no significant counterparty risk either. This area is also subject to
regular monitoring.
There were no risks related to financial instruments on the balance sheet date that resulted in any noteworthy risk concentration. Further details on these financial risks are contained in the
Notes.
Notes
page 188
Compliance risks
LEONI has set up an effective
compliance management system to avoid compliance risks. The compliance
fields of competition law, export control, prevention of corruption, Code of Ethics / Social Charta, Tread Act,
Compliance management system
page 112
information security / data protection, taxes and capital market law (BaFin) simultaneously constitute the principal compliance risks. Any infringements could entail substantial fines, claims for damages and, depending on
Competition law – As reported, LEONI has been affected since the end of February 2010 by international
investigations under competition law in the automotive supply sector. On 3 August 2012, the European Commission commenced proceedings against LEONI on possible breaches of competition law. As part of these
proceedings, the Commission is investigating whether the sector fixed prices and shared out tenders in the
sale of cable harnesses. LEONI is cooperating with the authority.
In October 2011, consumers (car buyers) in the United States initiated several civil proceedings in the form of
class action lawsuits against the major wiring systems manufacturers that operate internationally. The claimants allege that they paid excessively for their vehicles because of alleged breaches of US antitrust law. The
lawsuits were pooled in two class action suits comprising various classes of claimants. One of these proceedings was successfully resolved during the year under report, i.e. without any payment obligation for LEONI. In
the other proceedings the legal decision as to whether LEONI will continue to be involved is pending. LEONI
expects a favourable decision, probably in the next few months.
Export control – Any tightening of embargoes could stop shipments under signed contracts. This occurred in
2012 with respect to our business relationships with Iran and resulted in lost sales.
Product liability – LEONI’s output is used primarily for technically sophisticated products and equipment with
high safety standards. We minimise the associated risks by taking effective measures as part of process safety
and quality management. All plants are ISO 9001 certified and some, depending on the customer group they
supply, have additional ISO/TS 16949 (automotive industry), ISO 9100 (aerospace) or ISO 13485 (medical devices) certification. Some plants also have an environmental management system certified to ISO 14001. There
is also insurance cover for operating, product and environmental liability as well as for product recalls.
Environmental risks can virtually be ruled out because of the production methods used at LEONI. As environmentally harmful production materials are used in exceptional instances only, it is comparatively easy to take
specific, preventive measures at comparatively minor expense. Furthermore, we take corresponding care from
the outset.
the country, also imprisonment of managers.
118
Overall risk exposure
In the Management Board’s opinion the risk situation for the LEONI Group did not materially change in 2012.
We still regard the unstable political situation in North Africa as the biggest challenge. The successful placement of the borrower’s note loan as well as a long-term loan that can be drawn upon in 2013 and the proceeds
from the sale of LEONI Studer Hard AG further raised the Company’s risk-bearing capacity from a financing
perspective. The presentation below provides an overview of the most significant individual risks to LEONI,
the likelihood that they might occur and possible financial damage. In our assessment there are no other significant risks. Overall, the risks to the LEONI Group described above are, from today’s perspective, manageable
and do not threaten the Company’s continued existence.
Risks
Unrest in North Africa
Probability of occurrence 1
Maximum potential financial damage 2
possible
Cybercrime
less probable
critical
Outage of a major production facility
Economic slump (crisis)
Compliance risks
possible
less probable
Impairment (crisis)
perceptible
Copper price risk
possible
Bad debt (crisis)
Start-up and project costs
Loss of a medium-sized customer
less probable
minor
Pressure to lower prices
possible
Product liability and recall risks
2
less probable: once in 10–50 years
minor:
Profit for the year may be slightly reduced
possible:
once in 1–10 years perceptible: Profit for the year may be visibly reduced
critical:
Profit for the year may be consumed
1
Company information
119
Presentation of opportunities
The LEONI Group has the opportunity to outperform planning in numerous areas. They are presented below,
broken down by the classes of strategic opportunities and market opportunities, operational opportunities,
financial opportunities and compliance opportunities.
Strategic opportunities and market opportunities
Globalisation, innovation, system business and cost leadership – Thanks to its strategic alignment, the
LEONI Group has the opportunity to benefit more substantially and more quickly than planned from outside
developments, i.e. to expand its market position and to raise its profitability. The primary approaches to this
strategy: by further globalising its operations, LEONI can better exploit the
quite European in nature. Enhancing the power of innovation provides the opportunity to improve our market
position on the one hand with new products and solutions and, on the other hand, by ongoing optimisation
of our processes. The system business lever harbours potential in terms of gearing our range of manufacture
even more closely to customer requirements. Raising the efficiency of our production structures and process
entails the opportunity to achieve additional cost benefit and thereby to increase profitability.
The economic cycle – Generally speaking, LEONI has the opportunity to generate more sales in the markets it
targets if they outperform the overall market and demand is correspondingly rising. This applies especially to
the BRIC countries and South Korea. Should, for example, the automotive markets in the BRIC countries grow
more strongly, LEONI could benefit via both direct shipments to these regions and indirectly by supplying cars
exported from Europe.
Commodity prices – A more favourable trend in commodity prices would benefit LEONI’s cost-of-materials
ratio and therefore its margins.
Electromobility, green technology and alternative energy generation – New trends in technology and
society also present LEONI with growth opportunities – for instance the growing interest among car drivers
in hybrid and electric drive as well as electrical and electronic innovations in vehicles. Green technology and
energy saving are also playing an ever larger role in virtually all of the other sectors of importance to LEONI, especially so in the emerging countries. In China and India, for example, we see mounting potential for alternative energy generation using solar and wind power plant as well as for railway engineering. In general, the key
global trends – of mobility, urbanisation, environmental awareness and shortage of resources, demographic
change, globalisation as well as industrialisation and automation – present LEONI with additional expansion
opportunities in many areas.
Operational opportunities
The LEONI Group’s operating strengths include its leading position in the most important markets across
Europe, our global footprint in terms of distribution, development and production as well as our broad,
international customer base. These factors enable us to benefit globally from favourable market trends.
Group strategy
page 51
involve the four levers of our
opportunities in the emerging markets and increasingly internationalise its industrial business, which is still
120
LEONI also focuses sharply on core products and markets, has a consistently high level of expertise along the
entire value chain and covers an extensive portfolio of technology. The resulting strong competitive position
improves our growth opportunities as well.
Finally, the collaboration between our two business divisions in the context of a complementary value chain
creates synergies that provide LEONI with the opportunity not only to reduce costs, but also to expand. Our
Business Unit Electromobility, for example, to which both divisions are contributing their specialist know-how,
opens up good opportunities. LEONI now has a broad range of products for the future market of electromobility and has established a promising starting position for itself with numerous development assignments and
series production contracts.
In addition, the two divisions have the following, specific opportunities:
Opportunities in the Wiring Systems Division
International production network with facilities in the fastgrowing countries of China, India and Russia will enable us to
participate more than average in the projected good growth in
these markets.
Resolute optimisation of our production network in terms of cost
efficiency improves our earning power and enables us to keep
growing in our domestic European market.
Opportunities in the Wire & Cable Solutions Division
Further internationalisation of activity with the focus on Asia
and the NAFTA area provides opportunity for expansion in these
fast-growing regions.
Product, material and technology innovations above all in the
fields of halogen-free and flame-retardant cables, miniaturisation,
fiber optic and high frequency cables facilitate gains in market
share.
Enhanced expertise by way for example of ground-breaking
technological developments in lightweight construction and the
components segment provides the opportunity to win additional
contracts.
Stepped-up commitment in the areas of renewable energy –
especially hydro, wind and solar power – as well as medical technology, mobility and sensor technology will enable participation
in the growth to be expected in these markets.
Economies of scale thanks to further standardisation of wiring
system architecture could boost earnings.
Expansion of the system business enhances our position among
existing customers and provides opportunity to develop additional customer groups.
Growing demand for electrical components and ongoing electrification of drive technologies provides the opportunity to increase
sales per vehicle.
Extension of the value chain in the area of plugs and connectors
provides additional earning potential.
Financial opportunities
To cover the interest rate and currency risks described in the risk report, the Company for example engages
in hedging transactions under the auspices of the currency committee with the aim of avoiding any deviation from the budgeted exchange rate. Any appreciation in the currency involved in forex items that are not
hedged and any depreciation in the currency of the forex items that we have hedged presents an opportunity.
Compliance opportunities
Many of our customers attach particular value to an effective compliance management system and are increasGlobal Compact Index
page 220
ingly testing us for this by way of checklists. Our participation in the
United Nations Global Compact and
the successful external audit of our compliance management according to the IDW 980 auditing standard can
present a competitive advantage for LEONI and form the basis for further growth.
SWOT analysis
The table below provides an overview of LEONI’s principal strengths and weaknesses:
Company information
121
Company-specific
Market-specific
Strengths
Opportunities
Leading position in Europe‘s core markets
Sustained, stable market growth worldwide over medium term
Strong international footprint with distribution, development
and production
Strong market growth in the BRIC countries
Continuous expertise along the entire value chain and
a wide range of technologies
Technological change towards hybrid and e-drive
Broad, international customer base
Innovation in electrical systems and electronics in vehicle
manufacturing
Large low-cost proportion in the cost-sensitive product areas
Trend towards green technology and energy saving
Clear focus on core products and core markets
Expansion of system business
Short decision-making channels and flat hierarchies
Expansion of non-automotive business
Weaknesses
Threats
Still small share of the Indian and Brazilian markets
Heavy pressure on prices from the OEMs
Heavy exposure to the global automotive markets,
especially Europe
Rise in commodity prices
Trend of wages in low-cost countries
Political risks in low-cost countries
Intensifying competition and mounting competitive pressure
SWOT analysis
122
Forecast
Macroeconomic conditions
The conditions underlying the global economy will, in the view of the IMF, gradually improve in 2013: the monetary fund projects accelerating growth for this year, although this is still likely to be muted at a global rate of
about 3.5 percent. The main reason for this involves the still unfavourable prospects for the eurozone, whose
economic output is set to contract by about another 0.2 percent. With a forecast growth rate of 2.0 percent,
the US economy is not expected to make any sustained breakthrough yet either. Overall, therefore, the pace of
growth in the industrialised countries will remain at a rather weak 1.4 percent. The forecasts for the emerging
countries are more upbeat; following the slowdown in 2012 they should pick up significantly again from this
year with an increase of 5.5 percent. China is once again likely to be in first place here with 8.2 percent growth.
World economic growth 2011 until 2013
2011
3.9 %
2012
3.2 %
2013
3.5 %
Source: IMF World Economic Outlook (1/2013), 2013 estimate
Economic growth 2013 in selected regions
USA
2.0 %
Brazil
3.5 %
Eurozone
(0.2) %
Russia
3.7 %
Japan
1.2 %
China
8.2 %
India
5.9 %
Source: IMF World Economic Outlook (1/2013), estimate
In its outlook the IMF again points to the still existing risks, which could lead to a less favourable trend. The
economic forecasters anticipate dangers especially if governments in the eurozone ease up again in their
efforts to end the sovereign debt crisis and if an appropriate solution is not found in the United States to the
budget dilemma.
Company information
123
For the German economy the majority of research institutions expect a more difficult year compared with
2012, however without having to fear a recession. In its 2013 annual economic report, the German federal
government anticipates that the period of weakness over the six winter months can gradually be overcome
and that the economy will slowly get going again. For 2013 as a whole, the government estimates growth of
0.4 percent, and in 2014 the economy will in its opinion pick up further. The job market should hold steady at
the record level it has reached.
Sector setting
The prospects for the automotive industry remain double-edged in 2013. Whereas business in Europe will,
according to VDA estimates, on the whole remain problematic and another decline in sales of about 3 percent
is on the cards, the automotive business outside Europe should be on a positive trajectory. The association
sales should pick up by nearly 3 percent in 2013. The forecasts for global automotive output reflect this trend
in somewhat weakened form: according to estimates of IHS Global Insight, production of cars and light commercial vehicles will rise by just under 2 percent to 82.8 million units.
Production of cars and light commercial vehicles (LCVs) by region
2012
2013 million units
19.2
18.6
Europe
1.7
1.9
Middle East /
Africa
North America
15.4
15.9
Latin America
4.3
4.5
40.9
41.9
Asia
Source: IHS Global Insight (2/2013), 2013 estimate
Production of cars and LCVs by region 2013
Middle East / Africa 2 %
Latin America 5 %
North America 19 %
Asia 51 %
Europe 23 %
Source: IHS Global Insight (2/2013), estimate
anticipates growth above all on the revived key market in the United States and in China. Overall, global unit
124
The prospects for the commercial vehicle sector are on the whole positive, although the situation in China
and South America will remain difficult again this year. There are chances, however, of a market recovery in
Europe and of sustained growth in the United States and above all in Russia. IHS puts the 2013 output of commercial vehicles at 3.4 million units, an increase of just over 7 percent.
Commercial vehicles production in selected regions
2012
2013 million units
Europe
0.5
0,6
North America
0.4
0.5
South America
0.2
0.3
Asia
2.0
2.1
Source: IHS Global Insight (2/2013), 2013 estimate
The electrical and electronics industry is guardedly optimistic about 2013. Its ZVEI German sector association
projects an increase in output of about 1.5 percent and a sales increase of similar size to about € 177 billion. According to the association, the factors pointing in this direction are the revival at the turn of the year in orders
from China and the United States as well as the energy turnaround that is gaining momentum in Germany.
The ZVEI says that the long-term prospects are good because of the sector’s power of innovation and its broad
cross-sectional technologies.
The German machinery and plant engineering sector also expects a moderate uptrend. Its VDMA federation says there are chances of exceeding the previous year’s output level by about 2 percent in 2013. Impetus
is once again expected above all from the export business thanks to the German mechanical engineering sector’s leading innovative and competitive strength. Orders particularly from the United States and China should
pick up significantly.
The German information technology, telecommunications and consumer electronics sector embarked
on the current year with momentum. About 75 percent of ICT companies anticipate further sales increase
in 2013. Overall, the BITKOM association projects that the sector’s sales revenues will increase slightly by
1.6 percent to the record level of € 154 billion. The momentum of demand should also keep going worldwide.
The prospects on the global markets for environmental technology and resource efficiency are also favourable. According to a study by the German Federal Ministry of the Environment, these markets will grow annually at averages between 3 and 9 percent until 2025, in this period roughly doubling their overall size versus
2011.
Company information
125
Business performance and future alignment
The LEONI Group’s targets
Consolidated sales
€ billion
3.81
approx. 3.7
EBIT
€ million
235.8
approx. 170
€ million
154.2
approx. 190
Free cash flow 2
€ million
63.5
approx. 50
€ million
249.2
approx. 250
Equity ratio
%
35.4
approx. 35
%
20.8
approx. 15
1
2
excl. acquisitions
before acquisitions and divestments
The LEONI Group’s business performance
As expected, demand from the automotive industry and other customer sectors remained subdued in the first
few weeks of 2013, and the short-term market trend is difficult to project. Furthermore, many vehicle manufacturers are planning model changes in the months ahead, which will result in numerous new product start-ups
for LEONI. These will exert a positive effect on our business performance from the end of the current reporting period at the earliest. LEONI therefore regards 2013 as a transitional year and estimates – conservatively
projected – consolidated sales of about € 3.7 billion. In regional terms, we expect to see a further shift in the
direction of emerging markets and the United States. The amount of business will rise perceptibly in the BRIC
countries including South Korea and the NAFTA area, whereas it will decline in Europe.
Consolidated earnings before interest and taxes will probably dip to € 170 million in 2013. Along with the
absence of the non-recurring factors of the previous year and due also to the missing contribution to profit
because of the reduction in sales, this cautious forecast also takes into account heavy advance costs for the
impending production start-ups in the Wiring Systems Division. In addition, we will be spending on a large
number of internationalisation projects as well as the adjustment of our IT and engineering capacity to prepare for the growth that is to be expected in the future.
In our planning we put the price of copper at an average of € 6.00 per kg. It is also based on the assumption
of further wage cost rises, triggered by significant increases in the low-wage countries. Restructuring expenses
should be at about the previous year’s level.
For 2014 LEONI then projects a significant sales and earnings upsurge again, provided the underlying
economic conditions do not materially deteriorate. Forming the basis for this is the Wiring Systems Division’s
well-filled order book thanks to the large number of new projects it has won. We also foresee major growth
opportunities in the medium term and expect consolidated sales to rise to about € 5 billion by 2016. The
BRIC countries including South Korea are projected to account for about 20 percent of this total. This is where
the greatest potential continues to be. In keeping with our globalisation strategy, we will step up our activity
in these regions in the upcoming years as well. A boost can also be expected from expansion of the system
business and the products we offer for green technologies. These topics will continue to be at the heart of our
innovation strategy and will lead to selective enhancements to our range of products and services.
Actual 2012 figures Planned 2013 figures
126
There will be no fundamental change to LEONI’s business policy in the next two years. Our organisational
structure as well as the technologies and processes we use are continually reviewed from aspects of efficiency,
but any bigger changes are not on the cards here either. Our dividend policy continues to provide for a payout
of about one third of annual net income to shareholders.
In 2013 the Wiring Systems Division is operating in an environment characterised by moderate growth and
fierce competition, and is likely to generate external sales of about € 2.1 billion (2012: € 2.2 billion). This will
involve a significant change in the breakdown of sales due to the start-up of 16 new projects and the phasing
out of various model lines. The total amount of business will continue to shift in the direction of the emerging
markets in the BRIC countries as well as in the NAFTA area. Among other places, the focus will be on targeted
development of the Indian market.
The division’s earnings before interest and taxes should, from today’s perspective, come to about € 95 million and thus to significantly less than the previous year’s figure of € 134.5 million. The reasons for this are the
effects of the cautious sales projection and the preparations for numerous new projects. Furthermore, various
infrastructure projects will be needed to facilitate the targeted growth surge in the medium term.
Based on its well-filled order book, the Wiring Systems Division expects to enter its next expansion phase
in 2014. In the medium term, we should outpace the overall market’s growth and by 2017 more than double
the amount of business in the BRIC countries including South Korea. We will continue to optimise our efficient
production network in order to remain an attractive partner for the manufacturers that operate globally.
Among other projects, a new facility will be built in China and a production facility in Poland will be closed for
this reason. To underpin our good customer capital, we will also extend our systems expertise by boosting our
activity in the areas of components, connectivity and electromobility.
Wire & Cable Solutions Division
The Wire & Cable Solutions Division is again expected to generate external sales in 2013 of about € 1.6 billion.
Particularly its business involving special automotive cables in China and the United States is likely to pick up.
We will in the process benefit from our expanded capacity in these regions. The new facility in India, which
will probably commence production in March, will also make an initial contribution to sales. There should also
be an uptrend in the demand for our cables and cable systems for medical equipment, telecommunications,
automation engineering and infrastructure projects as well as in the fiber optics segment. Further declines are
to be expected, on the other hand, in sales of solar and data cables given the weak European economy. The
segment’s EBIT will, from today’s perspective, come to about € 75 million (2012 incl. the exceptional income
from the sale of LEONI Studer Hard in the amount of € 28.3 million: € 101.3 million). The internationalisation of the WCS Division’s activity will be taken further forward as part of our ‘WCS 4ward’
strategy project. Along with India, where lines to produce cables for the petrochemical and solar industries
as well as railway engineering are to be set up in addition this year, the focus will be on Russia, Southeast
Company information
127
Asia and the Middle East. We will also continue to expand our sales activity in these regions as well as in the
Americas. The power of innovation and the system business will also be further enhanced. Here the focus will
be on the areas of alternative conductor materials, high frequency technology, miniaturisation and halogenfree materials. The harmonisation of business and IT processes as well as continuation of the work towards
operational excellence will result in progress in terms of the efficiency lever.
Financial and asset situation
The LEONI Group’s financial and asset situation in 2013 will, from today’s perspective, stabilise at the previous
€ 250 million. The equity ratio will probably be about 35 percent.
Thanks to the early, successful refinancing measures taken in 2012, there is currently no need for any more
financing. The bond due in 2013 as well as the maturing borrower’s note loans will be repaid from available
funds and credit lines. In addition, the loan facility from the European Investment Bank will be drawn upon as
required. The capital investment projects will be funded from operating cash flow.
Capital expenditure
Group-wide, LEONI will probably spend about € 190 million on property, plant and equipment as well as intangible assets. Of this total, about 30 percent is to be used in Germany; 21 percent in Eastern Europe, 18 percent
in Asia, 15 percent in North Africa, 10 percent in the NAFTA area and 6 percent in the rest of Europe.
The Wiring Systems Division will account for about € 113 million of the total amount. Here the focus will be
on the numerous, planned new and follow-on projects for which we are preparing our production facilities
in Asia, the NAFTA area, North Africa and Eastern Europe. Also of strategic importance will be the expansion
of our facility in Zavolzhye, Russia, the setting up of an additional plant in China, the extension of automated
dashboard cable harness production in Romania as well as the updating of the centre of expertise in Kitzingen.
The Wire & Cable Solutions Division will, from today’s perspective, invest about € 64 million this year. The
focus will be on the areas of automotive cables, infrastructure cables as well as cable systems for medical and
automation equipment. In addition to the new plant in India, the plans involve setting up a facility to produce
special cables within an already existing space in China. Capacity is to be expanded in the NAFTA area as well.
year’s very sound level. Free cash flow should come to about € 50 million and net financial liabilities to around
128
Procurement
The proportion of materials in our value creation will in the years ahead remain just as high as it has been,
meaning that optimising procurement structures and costs will continue to be of great importance. The internationalisation of our supplier pool as well as the regional or worldwide combining of purchasing quantities
in the WCS Division will therefore be continued. The Wiring Systems Division will likewise forge ahead with
globalisation of its purchasing structures this year, boosting its procurement activity especially in the BRIC
countries including South Korea.
Employees
The number of the LEONI Group’s employees will probably diminish a little in 2013 because of the somewhat
lower amount of sales and the expected effects of efficiency enhancements at various low-cost locations. On
the other hand, we are planning especially in the Wiring Systems Division for the growth expected in 2014 by
preparing for expansion of our engineering capacity, primarily so in Kitzingen. Implementation of our new human resource strategy, furthermore, is intended to further enhance the appeal of LEONI as an employer.
The focal areas of our development work will remain virtually unchanged in 2013. Along with substituting
copper as a conductive material and expanding the use of alternative conductor materials to reduce weight
and costs, another key topic in the Wiring Systems Division will be the ‘networked vehicle’, i.e. communication
between the vehicle and the transport infrastructure. The Wire & Cable Solutions Division will, furthermore,
step up its development work especially in the areas of high frequency technology, miniaturisation as well as
halogen-free materials.
Sustainability
In mid 2013, LEONI will release its second UN Global Compact Communication on Progress and thereby
provide information on its latest developments in the area of sustainability. We will probably also again
participate in the Carbon Disclosure Project and work on further improving our contribution to preserving
the environment. Numerous technical measures in this respect are once again planned in the WCS Division,
especially to raise energy efficiency. There will also be events and training sessions to bolster environmental
awareness. Certification for the first time to either ISO 14001 or EMAS is due at three facilities in Germany and
Mexico. The Wiring Systems Division is planning for matrix certification to the ISO 14001 environmental standard to improve and document the focus on the environment at several of its facilities.
Quality management will also be continually improved. The Wiring Systems Division is working on further
consolidation of the QM, SHE and LPSplus sub-processes into the integrated management system. The Wire
& Cable Solutions Division will forge ahead with harmonisation of its business processes and our subsidiary in
Company information
129
Japan will be another facility certified for the first time to the ISO 9001 standard.
General statement on future growth
The Management Board of LEONI AG sees 2013 as a transitional year with a slight sales decline and a perceptible decrease in earnings. Numerous new product start-ups, internationalisation and other projects to prepare
for our future expansion will characterise the year. The financial and asset situation is likely in 2013 to stabilise
at the previous year’s sound level.
The next growth phase with considerable sales and earnings increases is likely to follow as early as 2014.
both divisions in many sectors of the future. In regional terms, we continue to see LEONI’s biggest growth opportunities in the BRIC countries including South Korea as well as in the NAFTA area.
Nuremberg, 21 February 2013
The Management Board
Dr Klaus Probst
Dieter Bellé
Dr Andreas Brand
Forming the basis for this is the Wiring Systems Division’s well-filled order book and the strong position of
Consolidated
financial statements
131
Consolidated statement
of comprehensive income
132
133
Consolidated statement of financial position 134
Consolidated statement of changes in equity 135
Notes
136
210
Audit opinion
212
213
131
01/01 to 31/12
Notes
Sales
2012
2011
3,809,007
3,701,487
(3,133,966)
(3,029,347)
675,041
672,140
Selling expenses
(192,186)
(181,937)
General and administration expenses
(185,262)
(156,957)
(93,596)
(84,095)
Cost of sales
Gross profit on sales
Research and development expenses
Other operating income
Other operating expenses
Expenses from associated companies and joint ventures
[6] [7]
48,890
9,917
[6]
(16,955)
(14,856)
[ 17 ]
EBIT
(121)
(7,071)
235,811
237,141
Finance revenue
[8]
4,729
1,814
Finance costs
[8]
(42,791)
(42,796)
Other income from share investments
Income before taxes
Income taxes
[9]
Net income
attributable to: Equity holders of the parent
Non-controlling interests
139
91
197,888
196,250
(41,867)
(40,291)
156,021
155,959
155,661
155,734
360
225
Earnings per share (basic and diluted) in Euro
[ 29 ]
4.76
4.99
Weighted average shares outstanding (basic and diluted)
[ 29 ]
32,669,000
31,184,500
under IFRS
[ € ‘000 ]
Company information
132
Consolidated statement of comprehensive income
[€ ‘000 ]
under IFRS
2012
01/01 to 31/12
Net income
2011
156,021 155,959
Other comprehensive income
Cumulative translation adjustments
Gains arising during the period
Less reclassification adjustments included in the income statement
Total cumulative translation adjustments
6,345
9,588
(9,787)
0
(3,442) 9,588
Available-for-sale investments
Total available-for-sale investments
137
0
137 0
Cash flow hedges
8,550
395
Less reclassification adjustments included in the income statement
1,380
(2,540)
Less reclassification adjustments included in the statement of financial position
Total cash flow hedges
0
(48)
9,930 (2,193)
Share in the other comprehensive income of associates and joint ventures
thereof: cumulative translation adjustments reclassified to the income statement of
€ (2,232 k) (previous year: nil)
(2,279) 426
Income tax relating to components of other comprehensive income
(3,716) 1,436
630 9,257
Total comprehensive income
156,651 165,216
attributable to: Equity holders of the parent
156,239 164,967
412 249
133
[€ ‘000 ]
2012
2011
156,021
155,959
Income taxes
41,867
40,291
Net interest
41,519
40,744
under IFRS
01/01 to 31/12
Net income
Adjustments to reconcile cash provided by operating activities:
Dividend income
Depreciation and amortisation
Impairment of non-current assets
(139)
(91)
116,202
107,045
0
8,108
Other non-cash expenses and income
(14,775)
6,395
Gain on disposal of non-current assets
(3,165)
351
(18,373)
0
Gain on the disposal of subsidiaries
Company information
Change in receivables and other financial assets
(7,729)
(56,574)
Change in inventories
7,086
(53,400)
Change in other assets
(6,477)
854
Change in provisions
(19,404)
(10,839)
Change in liabilities
(5,133)
71,667
Income taxes paid
(42,828)
(28,091)
Interest paid
(34,263)
(37,896)
1,162
1,491
139
211,710
91
246,105
(160,623)
(127,436)
(24,500)
(1,990)
Interest received
Dividends received
Capital expenditures for intangible assets and property, plant and equipment
Acquisitions of subsidiaries net of cash and cash equivalents
Change in operating assets and liabilities, adjusted for the impact of changes in the scope of consolidation
thereof: Cash paid € (26,574 k) (previous year: € (2,100 k))
Acquired cash and cash equivalents € 2,074 k (previous year: € 110 k)
(513)
(608)
Cash receipts from disposal of assets
9,051
3,005
Gain on the sale of associated companies
Income from the disposal of subsidiaries less cash and cash equivalents paid
98
128
50,988
0
(125,499)
(126,901)
thereof: Disposal proceeds € 51,031 k (previous year: nil)
Cash and cash equivalents paid € (43 k) (previous year: nil)
Cash used for capital spending activities
Cash receipts from acceptance of financial debts
Cash repayments of financial debts
Sale of own shares
255,030
23,467
(359,582)
(65,875)
0
111,518
(49,004)
(20,790)
Cash used for / provided by financing activities
(153,556)
48,320
Decrease / increase in cash and cash equivalents
(67,345)
167,524
Dividends paid by LEONI AG
(326)
4,228
Cash and cash equivalents at beginning of period
Currency adjustment
365,995
194,243
Cash and cash equivalents at end of period
298,324
365,995
Capital expenditures for other financial assets
134
Assets [€ ‘000 ]
under IFRS
Notes
31/12/2012
31/12/2011
298,324
365,995
Trade accounts receivable and other financial assets
[ 11 ]
478,148
456,841
Other assets
[ 12 ]
89,661
76,855
Receivables from income taxes
Inventories
[ 13 ]
Total current assets
11,370
10,731
488,535
458,973
1,366,038
1,369,395
625,948
Property, plant and equipment
[ 14 ]
677,246
Intangible assets
[ 15 ]
91,092
59,084
Goodwill
[ 16 ]
149,353
152,661
Shares in associated companies and joint ventures
[ 17 ]
715
22,416
Trade receivables from long-term development contracts
[ 11 ]
41,826
39,492
Other financial assets
[ 18 ]
6,491
4,570
Deferred taxes
[9]
37,867
33,252
Other assets
[ 19 ]
13,446
13,762
Total non-current assets
1,018,036
951,185
Total assets
2,384,074
2,320,580
31/12/2012
31/12/2011
Equity and liabilities [€ ‘000 ]
under IFRS
Notes
Current financial debts and current proportion of long-term financial debts
[ 20 ]
270,845
106,348
Trade accounts payable and other financial liabilities
[ 21 ]
639,376
608,171
Income taxes payable
Other current liabilities
[ 22 ]
Provisions
[ 23 ]
Total current liabilities
Long-term financial debts
[ 20 ]
32,568
39,288
144,124
142,899
35,945
47,193
1,122,858
943,899
276,648
493,569
Long-term financial liabilities
6,662
12,175
Other non-current liabilities
11,472
16,656
Pension provisions
[ 24 ]
46,162
44,919
Other provisions
[ 23 ]
23,012
25,798
Deferred taxes
[9]
Total non-current liabilities
52,132
46,083
416,088
639,200
Share capital
[ 25 ]
32,669
32,669
Additional paid-in capital
[ 25 ]
290,887
290,887
Retained earnings
[ 25 ]
479,319
372,662
Accumulated other comprehensive income
Equity holders of the parent
Total equity
[ 25 ]
40,562
39,984
843,437
736,202
1,691
1,279
845,128
737,481
2,384,074
2,320,580
135
Company information
Consolidated statement of changes in equity
Accumulated other comprehensive income
Share capital
Retained
earnings
Cumulative
translation
adjustments
Availablefor-sale
investments
Cash flow
hedges
Equity
holders of
the parent
Noncontrolling
interests
29,700
181,961
237,718
41,193
(58)
(10,384)
480,130
1,030
481,160
155,734
225
155,959
9,233
24
9,257
164,967
249
165,216
155,734
Other comprehensive
income
9,907
105
(779)
Total comprehensive
income
Capital increase
2,969
108,926
Dividend payment
(20,790)
111,895
111,895
(20,790)
(20,790)
31 December 2011
32,669
290,887
372,662
51,100
47
(11,163)
736,202
1,279
737,481
1 January 2012
32,669
290,887
372,662
51,100
47
(11,163)
736,202
1,279
737,481
155,661
360
156,021
578
52
630
156,239
412
Net income
155,661
Other comprehensive
income
(5,728)
60
6,246
Total comprehensive
income
Dividend payment
31 December 2012
(49,004)
32,669
290,887
479,319
(49,004)
45,372
107
(4,917)
843,437
156,651
Net income
Total
(49,004)
1,691
845,128
[€ ‘000 ]
1 January 2011
Additional
paid-in
capital
136
LEONI AG Notes
[ 1 ] General principles
LEONI AG (“LEONI”, the “Group” or the “Company”) was founded in Germany under the name of Leonische
Werke Roth-Nürnberg, Aktiengesellschaft by an agreement dated 23 April 1917 and was entered in the
commercial register on 2 February 1918. LEONI AG is registered with the District Court of Nuremberg under
number HRB 202. The Company is based in Nuremberg, at Marienstrasse 7. The Group’s principal activities are
described in Note 28.
These consolidated financial statements of LEONI AG have been prepared based on Section 315a of the
German Commercial Code (HGB – “Consolidated Financial Statements pursuant to the International Financial
Reporting Standards“) in accordance with the International Financial Reporting Standards (IFRS) and the associated interpretations (SIC/IFRIC interpretations) as obliged to by Directive (EU) no. 1606/2002 of the European
Parliament and of the Council concerning the adoption of international accounting standards in the European
Union. The term IFRS also covers the still valid International Accounting Standards (IAS).
LEONI’s consolidated financial statements on 31 December 2012 have been prepared in euros. Except where
stated otherwise, all amounts are presented in thousands of euros (“€ k”). The balance sheet is structured
by term, while the income statement is prepared using the function of expense method. The statement of
comprehensive income is issued in two related presentations. Where the balance sheet and income statement
items are summarised to improve clarity of presentation, they are shown separately in the Notes.
The accounting and valuation methods applied in the consolidated financial statements on 31 December
2012 are in line with those of the previous year with the exception of the new IFRS requirements applied for
the first time in the 2012 financial year. These are explained under Note 3.
The Management Board on 21 February 2013 authorised the presented consolidated financial statements for
the year ended 31 December 2012 for submission to the Supervisory Board.
The consolidated financial statements will be published in the electronic Federal Gazette (Bundesanzeiger)
under number HRB 202.
[ 2 ] Principles of consolidation as well as summary of key accounting
and valuation methods
The consolidated financial statements have been prepared on a historical cost basis, except for derivative
financial instruments and available-for-sale financial assets that have been measured at fair value.
Principles of consolidation
The consolidated financial statements include the accounts of LEONI AG and of all subsidiaries that are either
directly or indirectly controlled by LEONI AG. There is control when LEONI AG holds, either directly or indirectly, the majority of the voting rights or in other ways has the power to govern the financial and operating
policies of the enterprise so as to obtain benefits from its activities.
Subsidiaries are fully consolidated from the time of acquisition, i.e. from the time when the Group has acquired
control over the subsidiary. Inclusion in the consolidated financial statements ends as soon as LEONI no longer
has control. A change in the ownership share of a subsidiary is, without loss of control, accounted for as an
Company information
137
equity transaction. Losses are allocated to the non-controlling interests even when this results in a negative
balance.
The financial statements of the subsidiaries are prepared using uniform accounting policies on the same
balance sheet date as the financial statements of the parent company. All intercompany balances, income,
expenses as well as unrealised profits, losses and dividends from intercompany transactions are eliminated in
full.
All business combinations are accounted for using the acquisition method based on applying the requirements of IFRS 3. The cost of an acquisition is measured as the aggregate of the consideration transferred,
each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair
value or at the proportionate share of the acquiree’s identifiable net assets.
Acquisition-related costs are expensed.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of a contingent consideration, which is deemed to be an asset
or liability, will be recognised in accordance with IAS 39 either in profit or loss or in other comprehensive
measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For
income. If the contingent consideration is classified as equity, it should not be remeasured until it is finally
settled within equity.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Goodwill arises and is upon initial consolidation measured at cost if the consideration transferred and the
amount recognised for non-controlling interest exceeds the net identifiable assets acquired and liabilities asthe difference is recognised in profit or loss. After goodwill is first accounted for, it is tested for impairment
according to IAS 36 at least once a year, which may lead to an impairment loss (impairment-only approach).
It is an associated business when LEONI can exert significant influence over its operating and financial policies,
which is the case in principle when between 20 and 50 percent of the voting rights are held.
A joint venture involves the establishment of a separate company in which each venturer has an interest.
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that
is subject to joint control.
Shares in associated companies and in joint venture companies are accounted for under the equity method.
The shares are valued with their purchase price on the acquisition date, which is increased or reduced respectively in the subsequent periods for any changes in net assets of the company such as the proportionate share
of net income or loss and by received dividends. The proportionate net income or loss is determined using
sumed. If this transferred consideration is lower than the fair value of the net assets of the subsidiary acquired,
138
the accounting policies described in this Note. In line with the treatment of fully consolidated subsidiaries,
the goodwill included in the carrying amount of companies accounted for under the equity method are no
longer amortised either. Instead of a test for impairment of equity method goodwill, the whole investment
accounted for under the equity method is reviewed for impairment according to IAS 36, provided there are
indications of additional impairment loss. The Group determines on each balance sheet date whether there
are objectively discernible indications that the investment in an associated company or joint venture might
be impaired. If this is the case, the difference between the fair value of the investment and the carrying
amount is expensed as an impairment loss.
The financial statements of the associates and of the joint ventures are prepared using uniform accounting
policies on the same balance sheet date as the financial statements of the parent company.
Foreign currency translation
These consolidated financial statements are prepared in the presentation currency, the euro, which is the
functional currency of the group parent company, LEONI AG. The financial statements of the foreign subsidiaries included in the consolidated financial statements with a functional currency other than the euro, are,
under IAS 21, translated into the Group currency, the euro, according to the functional currency concept.
The functional currency of the individual subsidiaries is the currency of the primary economic environment
in which the company operates. The financial statements prepared in the respective functional currency of
the subsidiary are translated using the closing rate method, i.e. the assets and liabilities are translated from
the functional currency to the presentation currency at the closing exchange rate on the balance sheet date,
while the statements of income are translated using annual average exchange rates (arithmetic average of
the monthly average exchange rates). Any differences arising from the translation of assets and liabilities
compared with the previous year’s translation as well as translation differences between the income statement and the statement of financial position are recorded in other comprehensive income. On the disposal
of a foreign operation, the cumulative amount of the exchange differences in the other comprehensive
income relating to that foreign operation is recognised in the income statement when the gain or loss on
disposal is recognised.
A foreign currency transaction, i.e. a transaction entered into by a consolidated company in a currency
other than its functional currency, is recorded, on initial recognition in the functional currency, by applying
to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. In the subsequent periods monetary assets and liabilities are revalued
using the closing rate at each balance sheet date. The resulting currency differences are recorded in the
income statement. Non-monetary items are still carried at the transaction rate, or, if they are measured at fair
value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Exchange gains or losses that arise from measurement of monetary, principally intra-group items are
allocated to operating income (EBIT) to the extent that they involve exchange gains or losses directly related
Company information
139
to an operating transaction.
The exchange rates of the companies material to the consolidated financial statements have changed as
follows:
Average exchange rate at balance sheet date
[ 1 euro in foreign currency units ]
Currency
ISO Code
Brazil
Real
BRL
31/12/2012
2.69530
31/12/2011
2.41580
China
Renminbi Yuan
CNY
8.21170
8.14850
United Kingdom
Pound
GBP
0.81540
0.83720
Korea
Won
KRW
1,411.37200
1,490.14120
Mexico
Peso
MXN
17.19860
18.07310
Poland
Zloty
PLN
4.09290
4.45530
Romania
Leu
RON
4.43920
4.33260
Russian Federation
Rubel
RUB
40.19820
41.74280
Switzerland
Franc
CHF
1.20720
1.21620
USA
Dollar
USD
1.31830
1.29380
Annual average exchange rate
Country
Country
Currency
ISO Code
2012
2011
Brazil
Real
BRL
2.52011
2.32474
China
Renminbi Yuan
CNY
8.14034
9.00863
United Kingdom
Pound
GBP
0.81327
0.86918
Korea
Won
KRW
1,450.79172
1,542.83537
Mexico
Peso
MXN
17.06050
17.33813
Poland
Zloty
PLN
4.19326
4.12748
Romania
Leu
RON
4.45132
4.24440
Russian Federation
Rubel
RUB
40.17664
40.96978
Switzerland
Franc
CHF
1.20482
1.23248
USA
Dollar
USD
1.29192
1.39410
[ 1 euro in foreign currency units ]
140
Revenue recognition
Revenues are generated mainly from the sale of products. Pursuant to IAS 18, sales revenues are generally recognised net of value added tax (VAT) upon delivery of products to the customer or upon fulfilment of service
contracts. Delivery has occurred when the risks and rewards associated with ownership have been transferred
to the buyer. Provisions for customer rebates and discounts as well as for returns and other adjustments are
provided for in the same period the related sales are recognised. Fulfilment of service contracts occurs when
substantially all performance obligations have been met. In the case of long-term development contracts, revenues are recognised according to the stage of completion provided that the contracts meet the conditions for
applying the percentage-of-completion method pursuant to IAS 11. This applies to the development contracts
described below.
Interest income is recognised as interest accrues. By using the effective interest rate method this means that
the interest income recognised is the amount produced by using the effective interest rate. This is the rate that
exactly discounts estimated future cash flows through the expected life of the financial instrument to the net
carrying amount of the financial asset.
Dividend income is recognised when the shareholder’s right to receive payment is established.
Research and development costs
Research costs are expensed as incurred.
Development costs are expensed as incurred unless they relate to customer-specific development contracts
accounted for pursuant to IAS 11, or they meet the criteria of IAS 38 for capitalisation as an intangible asset.
Pursuant to IAS 11 for customer-specific development contracts that meet the corresponding conditions the
percentage-of-completion method is applied. The capitalised amount, where payment is expected after more
than one year, is disclosed under trade receivables from long-term development contracts. The current proportion is contained in trade receivables. The percentage of completion is determined according to the ratio of
total costs to costs incurred (cost-to-cost method). The income from development contracts is reported under
sales in the income statement.
Government grants
A government grant is recognised when there is sufficient assurance that the grant will be received and that
the enterprise will comply with the conditions attaching to it. Expense-related grants are recognised as income
on a systematic basis over the periods necessary to match them with the associated costs. Grants for an asset
are deducted from the cost of the asset.
Inventories
Inventories encompass raw materials, production supplies and goods purchased as well as work in progress
and finished goods. They are stated at the lower of cost and the net realisable value. Raw materials, production
Company information
141
supplies as well as goods purchased are evaluated at cost using the weighted average cost formula or at the
lower net realisable value on the balance sheet date. The net realisable value is computed based on the estimated selling price in the normal course of business less the estimated costs of completion and the estimated
costs necessary to make the sale. Costs of conversion of work in progress and finished products comprise,
alongside the direct costs of production material and production wages, proportionate material and production overhead costs based on standard capacity.
Non-current assets held for sale
mainly by a sale transaction and not by continued use, and if the criteria pursuant to IFRS 5 in this regard are
met. If non-current assets or a disposal group are classified as held for sale, depreciation is ceased and the
Company determines the fair value of such assets. If the fair value of the assets held for sale or the disposal
group, less the selling costs, is less than the net carrying amount of the assets, a write-down is made on the
fair value, less the selling costs. If the disposal plan changes and the criteria pursuant to IFRS 5 for an asset or
disposal group that were classified as held for sale are no longer met, they are no longer presented separately
A non-current asset, or a disposal group, is classified as held for sale if the related carrying amount is realised
but reclassified to the balance sheet item where they were originally recorded. They are valued at the lower
of the carrying amount before the asset or disposal group was classified as held for sale (as adjusted for any
subsequent depreciation, amortisation or revaluation that would have been recorded without classification as
held for sale) and their recoverable amount at the date of the decision not to sell.
are capitalised as part of the cost of a qualifying asset pursuant to IAS 23. A qualifying asset is an asset that
necessarily takes a substantial period of time to get ready for its intended use. Government grants for capital
investments reduce the cost of those assets for which the grant was awarded. In the subsequent periods,
property, plant and equipment is carried at cost less accumulated depreciation. It is depreciated over its probable economic life. Immovable assets are mostly depreciated on a straight-line basis and movable assets are,
depending on their type of use, depreciated using either the straight-line method or, if so required by their
actual use, the declining method. When carrying out larger-scale maintenance, the costs are recognised in the
carrying amount of the item of property, plant or equipment, provided that recognition criteria are met.
Property, plant and equipment is, upon initial recognition, valued at cost. Attributable borrowing costs
142
The following useful lives are assumed for depreciation:
Buildings and facilities
max. 50 years
Machinery and equipment
max. 12 years
Factory and office equipment
2 – 10 years
Computer hardware
3 – 5 years
Leased installations are depreciated on a straight-line basis over the respective shorter period of the term of
the lease or the estimated ordinary useful life.
A property, plant or equipment is derecognised either when it is disposed of or when no further economic
benefit is to be expected from either the use or disposal of the asset. The gains or losses resulting from
derecognition are determined as the difference between the net disposal proceeds and the carrying amount
and are, in the period in which the asset is derecognised, recorded in the income statement.
The residual values of the assets, useful lives and depreciation methods are reviewed at the end of the financial year, and if necessary adjusted.
Leases
Leases are classified as either finance or operating. Leasing transactions whereby LEONI is the lessee and bears
all substantial risks and rewards typical of ownership from use of the leased asset are accounted for as finance
leases. Accordingly, the lessee capitalises the leased asset and records the corresponding lease obligation in
the statement of financial position at the fair value of the leased property or, if lower, at the present value of
the minimum lease payments. The leased asset is depreciated over its economic life. If there is no reasonable
certainty at the beginning of the lease that the Group will obtain ownership, the leased asset is depreciated in
full over the shorter of the two periods of the expected useful life and the term of the lease. Lease payments
are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant
rate of interest on the remaining balance of the liability. Finance charges are recognised in the income statement. All other leasing agreements entered into by LEONI, as a lessee, are accounted for as operating leases.
The lease payments are expensed on a straight-line basis over the lease term.
Whether an arrangement contains a lease is determined on the basis of the arrangement’s economic substance at the time it was concluded and requires an assessment whether meeting the contractual arrangement
depends on the use of a certain asset or certain assets and whether the arrangement gives the right to use the
asset.
Intangible assets
Intangible assets comprise patents, software, licenses and similar rights, as well as customer relationships,
brands, technology and production know-how acquired in the context of business combinations. An intangible
Company information
143
asset that results from development expenditure is capitalised if a newly developed product or process can be
clearly defined, is technically feasible and is intended for either own use or for sale. Capitalisation also assumes
that the development expenses can with a sufficient degree of likelihood be covered with future inflow of cash
and cash equivalents and the other IAS 38.57 criteria are met.
Intangible assets acquired separately are, upon initial recognition, valued at cost. The costs of intangible
assets acquired as part of business combinations equal their fair values as at the date of acquisition. In the
subsequent periods, intangible assets are carried at their cost less any accumulated depreciation and any accumulated impairment losses. Measurement in the subsequent periods should differentiate between intangible
According to IAS 38, intangible assets with a finite useful life must be amortised over their useful life. The
Company therefore, in accordance with these requirements, amortises development costs capitalised as assets
on a straight-line basis and amortises other intangible assets with a finite useful life on a straight-line basis
over their useful lives to their estimated residual values, which is normally nil. Other intangible assets with a
finite useful life are mainly software licenses with an estimated useful life of three years as well as customer relationships with useful lives of six to 23 years as well as technology and production know-how with a useful life
assets with a finite useful life and with an indefinite useful life.
of five to 15 years, in both cases acquired in the context of business combinations. The amortisation method
and the amortisation period for an intangible asset with a finite useful life are reviewed, at least, at the end of
each financial year. Any changes to the amortisation method and the amortisation period due to revision of
the expected useful life or the expected use of the asset’s future economic benefit are treated as changes in
estimates.
According to IAS 38, intangible assets with an indefinite useful life have no longer been amortised; instead
down to their lower recoverable amount. The review is carried out as at 31 October of each year according to
the same principles as in the case of goodwill. The remarks below therefore apply accordingly.
Intangible assets with an indefinite useful life are reviewed once a year to determine whether the estimate
of assessment of an indefinite useful life is still justified. If this is not the case, the assessment is prospectively
changed from an indefinite to a definite useful life. LEONI recorded brands acquired in the context of business
combinations as intangible assets with an indefinite useful life.
Intangible assets are derecognised when they are disposed of or when no further economic benefit is to be
expected from either their use or disposal.
such intangible assets must, according to IAS 36, be reviewed for impairment at least annually and written
144
Goodwill
Goodwill from a business combination is, upon initial recognition, measured at cost calculated as the excess of
the transferred consideration over the identifiable assets acquired and liabilities assumed. After initial recognition, goodwill is measured at the acquisition cost less any accumulated impairment losses.
Goodwill is not amortised; instead it is in line with the requirements of IAS 36 reviewed for impairment at
least once a year. The Group reviews the goodwill for impairment annually as at 31 October. A review also
takes place if events or circumstances indicate that there might be an impairment loss. For the purpose of
the impairment test, goodwill acquired in the context of a business combination is, from the acquisition date,
to be allocated to the Group’s cash-generating units expected to benefit from the synergies of the business combination. This applies regardless of whether other assets or liabilities of the acquired business are
allocated to these cash-generating units. Goodwill is tested at the level of the cash-generating unit to which
it is allocated by comparing the carrying amount of the cash-generating unit or units with the recoverable
amount. Impairment has occurred if the carrying amount exceeds the recoverable amount, requiring a writedown to the recoverable amount. The recoverable amount corresponds to the higher of the two amounts
from the fair value less cost to sell and value in use. The value in use of a cash-generating unit is defined as the
present value of projected cash flows to the Company from the cash-generating unit. To determine the value
in use, the projected cash flows are discounted the their present value based on a discount rate before tax that
reflects current market assessments of the time value of money and the risks specific to the cash-generating
unit. An appropriate valuation model is applied to determine the fair value less cost to sell. This is based on
valuation multiples, discounted cash-flow valuation models, stock market prices and other available indicators
of the fair value.
Later reversal based on disappearance of the reason for a goodwill impairment recorded in previous financial years or interim reporting periods is not permitted.
Impairment testing of intangible assets with a finite life and of property, plant and equipment
An assessment is made at each balance sheet date whether there are any indications that an impairment loss
may have occurred. If there are such indications, the recoverable amount of the asset is determined and compared with its carrying amount. If the recoverable amount is lower than the carrying amount, an impairment
loss is recognised on the lower recoverable amount. The recoverable amount is the higher of the two amounts
from the fair value less cost to sell and value in use. The latter is the present value of future cash flows that can
probably be derived from the asset. To determine the value in use, the projected cash flows are discounted the
their present value based on a discount rate before tax that reflects current market assessments of the time
value of money and the risks specific to the cash-generating unit. An appropriate valuation model is applied to
determine the fair value less cost to sell. This is based on valuation multiples, discounted cash-flow valuation
models, stock market prices or market values and such other available indicators of the fair value as estimates
by appraisers and historical data.
If specific cash flows generated largely independently from other assets or groups of assets cannot be
allocated to the individual assets, they are tested for impairment based on the smallest, overriding cashgenerating unit of assets.
If the reasons for applying the impairment charge have disappeared, the write-down on the asset is reversed.
Such reversal is limited to the amount that would have resulted when taking amortisation or depreciation into
account.
Company information
145
Regardless of whether there is evidence of impairment, a corresponding test for impairment is applied once
a year to both intangible assets that are not yet ready for use and intangible assets with an indefinite useful
life.
Financial instruments
A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial
liability or equity instrument of another enterprise. Financial instruments recorded as either financial assets
or financial liabilities are as a matter of principle presented separately. They are reported on a net basis only
Financial instruments are recognised as soon as LEONI becomes a contracting party to the financial instrument. In the case of regular way purchases or sales in the context of a contract whose conditions provide for
the asset to be delivered within a period of time that is normally determined by the rules or conventions of the
respective market, the settlement date, i.e. the date on which the asset is supplied to or by LEONI, is pertinent
to initial recognition as well as derecognition.
Financial assets comprise in particular cash and cash equivalents, trade receivables as well as other origi-
where a right of set-off with respect to the amounts exists at the present time and it is intended to settle net.
nated loans and receivables, financial instruments held to maturity as well as both primary and derivative
financial assets held for trading purposes.
Financial liabilities normally provide a claim for return in cash or another financial asset. These comprise
particularly bonds and other securitised liabilities, trade liabilities, liabilities to banks, liabilities under finance
leases, borrower’s note loans and derivative financial liabilities.
The contractual rights to receive the cash flows from a financial asset are extinguished.
■■
Although the Group retains the rights to receive the cash flows from financial assets, it assumes a contractual
obligation to immediately pay the cash flows to a third party in the context of an agreement that meets the
requirements of IAS 39.19 (“pass-through arrangement”).
■■
The Group has transferred its contractual rights to receive the cash flows from a financial asset and substantially all the risks and rewards incident to ownership of the financial asset have thereby been transferred,
or alternatively when control of the financial asset has been transferred.
Cash receipts from the sale of receivables that were not yet passed on to the buyer of the receivables on the
balance sheet date are reported under other financial liabilities.
Financial liabilities are derecognised when the obligation underlying the liability has been met, terminated
or extinguished.
Financial instruments are initially recognised at their fair value. The assumption or issue of directly attributable transaction costs is considered when determining the carrying amount if the financial instruments are not
measured at fair value through profit or loss.
For subsequent measurement the financial instruments are allocated to one of the measurement categories
listed in IAS 39 to which they are designated at the time of their initial recognition.
Financial assets are derecognised when one of the three following conditions is met:
■■
146
Financial assets
Financial assets are divided into the following categories:
■■
Financial assets remeasured to fair value through profit or loss
This category comprises financial assets held for trading (FAHft) and financial assets that were, upon initial
recognition, designated as financial assets at fair value through profit or loss (FVtPL). Financial assets are
classified as held for trading if they are acquired and held with a view to disposal in the near future. Derivatives, including embedded derivatives recognised separately, are also classified as held for trading with the
exception of such derivatives that were designated as a hedging instrument and are effective as such.
Gains or losses on financial assets of this category are recognised in the income statement.
Neither in the 2012 financial year nor in the previous year did the Company classify any primary financial
assets as held for trading, nor did it make use of the option to designate financial assets at fair value through
profit or loss upon their initial recognition.
■■
Held-to-maturity investments
Held-to-maturity investments (HtM) are non-derivative financial assets with fixed or determinable payments
and fixed maturity that an enterprise has the positive intent and ability to hold to maturity. They are measured at amortised cost using the effective interest rate method. Gains or losses are recognised in net profit or
loss when the financial asset is derecognised or impaired, as well as through the amortisation process.
The Group had financial assets of this category in neither fiscal 2012 nor the previous year.
■■
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Following initial recognition, loans and receivables are measured at amortised
cost using the effective interest rate method less any impairment.
Valuation allowances are made when receivables are uncollectible or probably uncollectible and a reliable
estimate of the valuation allowance can be made. There is need for valuation allowance when there are objectively discernable indications such as receivables overdue for a prolonged period, initiation of foreclosure
measures, looming default or overindebtedness as well as insolvency proceedings having been applied for
or commenced. Trade receivables with usual payment terms, which normally do not exceed twelve months,
are therefore recognised at the nominal amount, less appropriate allowances. Receivables that do not bear
interest or bear below market interest rates and have an expected term of more than one year are discounted with the discount subsequently amortised to interest income over the term of the receivable.
Impairment of trade receivables as well as receivables from long-term development contracts is recognised
in separate impairment accounts. Impairment losses of all other financial assets are recognised directly.
Gains or losses are recognised in the income statement when the loans and receivables are derecognised or
impaired, as well as through the amortisation process.
■■
Available-for-sale financial assets
Available-for-sale financial assets (AfS) are non-derivative financial assets that are designated as available
for sale and are not classified in one of the aforementioned categories. They must be measured at their fair
Company information
147
value. The gains or losses resulting from valuation at fair value are recorded separately as accumulated other
comprehensive income within equity. If there are significant loss events or, in the case of equity instruments,
losses ongoing over a longer period, this will be expensed accordingly in the income statement. The Group
assumes there to be a significant loss event involving impairment of more than 20 percent and prolonged
decline in value of equity instruments to be probable when there has been continued loss in value over a
period of twelve months. Later reversals of impairment on available-for-sale financial assets are as a matter
of principle recorded as accumulated other comprehensive income. Only in the case of debt instruments are
reversals recognised in the income statement up to the original amount of impairment, with any amounts
price in an active market for investments in equity instruments and that their fair value cannot be reliably
measured, they are carried at acquisitions cost. A write-down to the present value of the future cash flows is
made in the case of a decline in value other than temporary.
Financial liabilities
Financial liabilities that fall into the category of “financial assets at fair value through profit or loss” are also
above that recorded as accumulated other comprehensive income. Provided that there is no quoted market
carried at fair value in the subsequent periods with the resulting gains or losses recognised in the income
statement.
This category comprises financial liabilities held for trading (FLHfT) as well as liabilities that were, upon initial recognition, designated as financial liabilities at fair value through profit or loss (FVtPL). Financial liabilities
are classified as held for trading if they are acquired and held with a view to disposal in the near future. Derivatives, including embedded derivatives recognised separately, are also classified as held for trading with the
Neither in the 2012 financial year nor in the previous did the Company classify any primary financial liabilities as held for trading, nor did it make use of the option to designate financial liabilities at fair value through
profit or loss (FVtPL) upon their initial recognition.
All financial liabilities that do not fall into this category and are not derivative financial instruments are
measured at amortised cost using the effective interest rate method (Financial Liabilities at Amortised Cost
– FLAC). In the case of current liabilities, the amortised cost corresponds to either their repayment or settlement value. Gains or losses are recognised in the income statement when the liabilities are derecognised or
amortised.
Cash and cash equivalents comprise cash in hand, cheques and immediately disposable bank deposits with an
original maturity of three months or less. Cash is recognised at par value.
exception of such derivatives that were designated as a hedging instrument and are effective as such.
148
Derivative financial instruments and hedging activities
Derivative financial instruments entered into by the LEONI Group are recorded at their fair value on the balance
sheet date. Depending on their maturity, derivatives with a positive fair value are reported as current or noncurrent other financial assets and derivates with a negative fair value are reported as current or non-current
other financial liabilities. In general, the Group recognises the changes in fair value of derivative financial
instruments as earnings. However, the Group records changes in fair value of foreign currency derivatives used
to hedge anticipated foreign currency-denominated cash flows on firm commitments and forecast transactions in accumulated other comprehensive income until the hedged item is recognised in earnings when the
requirements of the standard to apply cash flow hedge accounting are met. The reclassification from accumulated other comprehensive income into earnings occurs in the same period as the underlying transaction takes
place and has effect on net income. The ineffective portions of the fair value changes of those derivatives are
recognised in earnings immediately. The fair value changes of interest rate derivatives designated to hedge
non-current liabilities subject to interest rate fluctuation are also recognised in accumulated other comprehensive or directly in equity if they meet the requirements to apply cash flow hedge accounting. The amounts
recorded in other comprehensive income subsequently lead to the interest expenditure from the relevant
underlying transaction recorded in the income statement being balanced.
Commodity future transactions that are settled in cash are recognised as derivatives, changes in the fair
value of which are recognised in the cost of sales.
Contracts entered into for the purpose of receipt or supply of non-financial items according to the Group’s
expected purchase, sale or usage requirements and held as such (own use contracts) are reported not as
derivative financial instruments but as pending transactions.
If contracts contain embedded derivatives, such derivatives are reported separately from the host contract when the economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics and risks of the host contract. The review whether a contract contains an embedded
derivative that must be reported separately from the host contract is made at the time when the Company
became a contracting party. A reassessment is made only when there are major changes to the terms of the
contract that result in a significant change to the cash flows.
Accruals
Accruals are also reported under liabilities. Accruals are liabilities to pay for goods or services that have been
received but have not been paid or invoiced by the supplier.
Pension and other post-employment benefits
The valuation of defined-benefit pension obligations is based upon actuarial computations using the
projected-unit-credit method in accordance with IAS 19. Changes in the actuarial assumptions or differences
between the actual development and the original assumptions as well as gains or losses on the pension plan
or plan assets (actuarial gains or losses) as a difference between the actual and expected return on plan assets
are amortised over the average remaining service period of active employees expected to receive benefits
under the plan, if a corridor of 10 percent of the present value of defined benefit obligation (DBO) or 10 percent
of the fair value of plan assets is exceeded. Past service cost is expensed on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits are already vested immediately
Company information
149
following the introduction of, or changes to, a pension plan, an enterprise should recognise past service cost
immediately.
The amount recognised as a defined benefit asset or liability comprises the present value of the defined
benefit obligation, adjusted by the actuarial gains or losses not yet recognised, less the past service cost not
yet recognised and less the fair value of plan assets out of which the obligations are to be settled directly.
The value of a defined benefit asset is limited to the sum of previously unrecognised past service cost and the
present value of any economic benefits available in the form of refunds from the plan or reductions in future
contributions to the plan.
presented under finance costs.
Other provisions
Other provisions are recorded when a present legal or constructive obligation to a third party has been
incurred from past events, the payment is probable and the amount can be reasonably estimated. So far as the
Group expects repayment for an accrued provision at least in part for example from an insurance policy, such
The interest costs relating to retirement benefit obligations as well as the expected return on plan assets are
repayment is recognised as a separate asset provided the inflow of the repayment is virtually certain. The provisions are valued according to IAS 37 with the best estimate of the amount of the obligation. Where provisions
do not become due until after one year and a reliable estimate of the payment amounts and dates is possible,
the present value for the non-current proportion is determined on a discounted basis. Accrued interest is
recognised under interest expense.
Obligations to dispose of an asset and to re-cultivate its site or similar obligations must be recognised as a
quent periods this amount added to the asset is to be depreciated over its residual useful life. The best possible
estimate of the payment obligation or provision is accreted to its present value at the end of each period.
Restructuring provisions are recognised when the constructive obligation has arisen according to the criteria
under IAS 37.72.
Accruals are not reported under provisions, but rather under liabilities.
Restructuring cost
Costs incurred in connection with restructuring measures are presented in other operating expenses because
such costs do not pertain to the general operating activity of the functional areas and this provides a transparent picture of the Group’s restructuring activity. A breakdown of this cost according to the functional areas
shown on the income statement is contained in Note 6.
component of acquisition and production costs and simultaneously recognised as a provision. In the subse-
150
Income taxes
The current tax assets and tax liabilities for the current and prior periods are measured at the amount expected
to be recovered from the taxation authority or paid to the taxation authority. Calculation of the amount is
based on the tax rates and tax laws in force on the balance sheet date.
Deferred tax is, pursuant to IAS 12, formed according to the balance sheet liability method. This provides that
tax assets and liabilities for all temporary differences, apart from the exceptions under IAS 12.15, IAS 12.24,
IAS 12.39 and IAS 12.44, between the carrying amount in the statement of financial position and the amount
for tax purposes as well as for tax loss carryforwards are recognised (temporary concept). Deferred taxes are
measured using the currently enacted tax rates in effect during the periods in which the temporary differences
are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax law is recognised in
the period that the law is enacted. Deferred tax assets are applied only to the extent that it is more likely than
not that the tax benefit will be realised. The deferred tax assets and those not recognised are reviewed in this
regard on each balance sheet date.
Deferred tax assets and liabilities are offset if they relate to income taxes levied by the same taxation authority and the Group has a legally enforceable right to set off current tax assets against current tax liabilities.
Income taxes referring to items that are recognised in other comprehensive income are also recognised in
other comprehensive income and not in the income statement.
Earnings per Share
Earnings per share are computed in accordance with IAS 33, Earnings per Share. The basic earnings per share
are computed by dividing consolidated net income due to the LEONI shareholders by the weighted average of
the number of ordinary shares outstanding during the relevant period. The diluted earnings per share are computed by dividing consolidated net income attributable to the LEONI shareholders by the total of the weighted
average number of ordinary shares outstanding, plus the weighted average number of securities that can be
converted into ordinary shares. There was no dilution in the reporting periods presented.
Statement of cash flows
The statement of cash flows is classified by operating, investing and financing activities in accordance with
IAS 7. This involves cash flows from operating activities being determined by the indirect method whereby
net profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of
past or future operating cash receipts or payments, and items of income or expense associated with investing
or financing cash flows. Undistributed income from entities valued under the equity method and from other
comprehensive income in the income statement is principally reported under “other non-cash expenses and
income”. Interest paid and interest and dividends received are classified as cash flows from operating activities.
Dividends paid are classified as a financing cash flow. The cash holdings comprise cash and cash equivalents.
These include cash in hand, cheques and immediately disposable bank deposits with an original maturity of
up to three months. The effect of exchange rate-related changes in value on cash and cash equivalents is presented separately so that the cash and equivalents at the beginning and end of the period can be reconciled.
Segment reporting
Segment reporting is based on the accounting standard IFRS 8, Operating Segments, following the management approach contained therein, which provides for reporting based on the internal organisational and
Company information
151
reporting structure as well as what management uses internally for evaluating segment performance. The
segment reporting and designation therefore follows the internal organisational and reporting structure of
the Group. The Group is organised into business units by products and services for the purpose of corporate
governance. The Group therefore has two segments subject to reporting: Wire & Cable Solutions and Wiring
Systems. Management monitors the earnings before interest and taxes (EBIT) separately to take decisions on
allocation of resources and to determine the profitability of the segments. The EBIT is ascertained in line with
the accounting and valuation principles of the consolidated financial statements. It also contains the earnings
Key judgments, estimates and assumptions
When preparing the consolidated financial statements management makes judgments, estimates and assumptions that influence the amounts of assets, liabilities and contingent liabilities as well as the expense and
income reported on the balance sheet date. The uncertainty that these assumptions and estimates involve
can, however, in future periods cause outcomes that result in major adjustment to the carrying amounts of the
assets and liabilities concerned.
from measurement under the equity method of joint ventures and associates.
The most significant assumptions concerning the future as well as other key sources of estimation uncertainty at the balance sheet date, which present a risk that material adjustment to the carrying amounts of the
assets and liabilities will be necessary within the next financial year, are explained hereinafter.
Testing of the goodwill and intangible assets with an indefinite useful life is based on their value in use.
Non-current assets with a finite useful life were also tested for impairment based on their value in use. To estimate the value in use the Group must estimate the probable future cash flows of the cash-generating units to
the present value of these cash flows (discounted cash flow method). The cash flows are extrapolated from the
business planning for the next five financial years, excluding any restructuring measures to which the Group
has not yet committed and material, future capital expenditure that would raise the performance of the cashgenerating units tested. The business planning is prepared on a bottom-up basis, meaning that the budgeted
figures are prepared in detail for each business unit or business group and subsidiary and condensed to the
segments and the Group as a whole. Key planning assumptions are based on the unit-sales projections issued
by the carmakers. Accordingly, the recoverable amount or value in use is heavily dependent on the projections for quantities sourced. The recoverable amount is, furthermore, heavily dependent on the discount rate
applied under the discounted cash flow method. Goodwill amounted to € 149,353 k on 31 December 2012
(previous year: € 152,661 k). Although in the case of one item of goodwill the test for impairment produced
a positive result of € 6,318 k, the value in use of the underlying cash-generating unit would, all other
parameters being equal, correspond to its carrying amount when increasing the discount rate before taxes by
1.59 percentage points and disregarding a growth discount on the terminal value. A further increase in the
which the non-current asset or goodwill relates, and moreover choose a reasonable interest rate to compute
152
interest rate could therefore entail need for write-down. The size of the write-down would depend on the specific test finding and could possibly also mean, alongside impairment of the item of goodwill, impairment of
intangible assets as well as property, plant and equipment. Further details of the tests for impairment of goodwill are to be found in Note 16. In the case of intangible assets with an indefinite useful life this exclusively involves brands acquired in a business combination. Their carrying amount on 31 December 2012 was the same
as in the previous year: € 2,128 k. In the case of one brand, the test for impairment of these assets found that an
increase in the pre-tax discount rate by just 0.95 of a percentage point could, all other parameters equal, entail
a need for write-down that could also, depending on the specific test findings, affect other non-current assets
along with this brand. Further details of the tests for impairment of intangible assets with an indefinite useful
life are to be found in Note 15. Intangible assets with finite useful lives involved a carrying amount of
€ 88,964 k on 31 December 2012 (previous year: € 56,956 k). Property, plant and equipment came to a carrying
amount of € 677,246 k on 31 December 2012 (previous year: € 625,948 k). In the case of the cash-generating
unit that comprises the local business from the purchase of Daekyeung, the intangible assets with a finite
useful life, which involved mainly the acquired customer relationships, as well as the property, plant and
equipment were tested for impairment because of the loss situation and the major deviation from the original
budget targets. The test was based on the value in use, with the projected cash flows extrapolated from the
current five-year plan. The pre-tax discount rate applied was 12.46 percent. The test did not find any need for
write-down. The value in use exceeded the carrying amount of € 26.2 million by € 1.1 million. From an increase
in the pre-tax interest rate by more than 0.43 of a percentage point the value in use would, all other parameters being equal, drop below the carrying amount and there could be write-downs on intangible assets as
well as property, plant and equipment.
Derivates that are related to future business combinations and fall within the scope of IAS 39 are measured
at fair value. This is determined on the basis of a discounted cash flow model whereby the future cash flows to
be estimated are extrapolated from the five-year planning as prepared by management. Key planning assumptions are based on the unit-sales projections issued by the carmakers. Accordingly, the fair value is heavily
dependent on the projections for quantities sourced. The fair value is also heavily dependent on the discount
rate applied under the discounted cash flow method. On 31 December 2012 there was no derivative related to
future business combinations. In the previous year one derivative with a negative carrying amount of € 673 k
was recognised as at 31 December 2011. It pertained to the purchase made at the beginning of fiscal 2012 of
the outstanding 50 percent of the shares in the South Korean joint venture Daekyeung T&G Co. Ltd.
Management must, with respect to accounting for capitalised deferred taxes relating mainly to unused
loss carryforwards, make estimates and judgments concerning future tax planning strategies, the expected
timing and the amount of taxable profit available in the future for use of the loss carryforwards. Deferred tax
assets are recognised to the extent that deferred tax liabilities in the same amount and with the same term
applicable to them are expected. Furthermore, deferred tax assets are recognised only if future taxable income
is with high probability expected that is sufficient to use the deferred tax assets from loss carryforwards and
temporary differences. For this judgment the taxable income is extrapolated from the business planning that
has been prepared according to the principles described above. Due to the mounting uncertainty about the
future, the period under consideration is normally three years. In the case of entities in loss situations, deferred
tax assets are not recognised until there are signs of a turnaround or it is highly probable that the future positive results can be generated. On 31 December 2012 the carrying amount of deferred tax assets was € 37,867 k
(previous year: € 33,252 k).
Company information
153
Further details are presented in Note 9.
The pension expense pertaining to defined benefit plans post employment is determined based upon actuarial computations. These measurements are based on assumptions and judgments with respect to discount
rates, expected return on plan assets, future wage and salary increases, mortality and future pension increases.
Due to the non-current nature of such plans, such estimates are subject to material uncertainties. For retirement benefit obligations the average discount rate across the Group amounted to 3.58 percent (previous year:
4.24 percent). At a rate 1.0 percent higher the defined benefit obligation would have been € 37.2 million less.
A 1.0 percent reduction the rate would have involved an increase of € 50.6 million in the defined benefit
and profit or loss for the 2012 financial year. Pension provisions amounted to € 46,162 k on 31 December 2012
(previous year: € 44,919 k). There was on 31 December 2012 an asset of € 11,957 k (previous year: € 11,967 k)
pertaining to the retirement benefit plan in the United Kingdom. Further details are presented in Note 24.
[3]
New accounting requirements
obligation. As the corridor method is used, this would not have had any influence on the pension provision
New accounting requirements applied for the first time in the financial year
■■
In October 2010, the IASB issued amendments to IFRS 7, Financial Instruments: Disclosures, which allow
users of financial statements to improve their understanding of transfer transactions of financial assets (for
example, securitisations), including understanding the possible effects of any risks that may remain with the
amount of transfer transactions are undertaken around the end of a reporting period. These changes are
to be applied to financial years beginning on or after 01 July 2011. Due to immateriality further disclosures
were not required.
Future, new accounting requirements
A) The following accounting requirements endorsed by the European Union (EU) were not applied
because application will only become obligatory in future periods:
■■
In June 2011, the IASB issued an amendment to IAS 1, Presentation of Financial Statements – Presentation of
Items of Other Comprehensive Income. It changes the grouping of items presented in other comprehensive
income. Items that could be reclassified (or ‘recycled’) to profit or loss at a future point in time are to be presented separately from items that will never be reclassified. This change is to be applied for the first time to
financial years beginning on or after 1 July 2012. The new requirements will result in changes to the Group’s
presentation of the items in other comprehensive income.
entity that transferred the assets. The amendments also require additional disclosures if a disproportionate
154
■■
Also in June 2011, the IASB issued numerous amendments to IAS 19, Employee Benefits. These range from
fundamental changes such as removing the corridor mechanism, which served to spread or smooth the
volatility arising from retirement benefit obligations over time, and the concept of expected returns on
plan assets to simple clarifications and re-wording. This amended Standard is to be applied for the first
time to financial years beginning on or after 1 January 2013. As LEONI applied the corridor mechanism and
this will no longer be permitted, with actuarial gains and losses instead having to be recognised in other
comprehensive income, these changes will impact on the retirement benefit obligations to be recognised
in the statement of financial position as well as on equity. The actuarial losses not yet recognised under the
corridor method will reduce equity in the future; at the same time they will increase the pension provisions
to be reported in the statement of financial position and reduce the item previously presented on the asset
side to nil. The changed measurement of the returns on plan assets will also impact on the income statement. The expected returns on plan assets and the interest expense on retirement benefit obligations will
in the future be replaced by a uniform net interest component. The impact of the amendments described
above will probably be as follows:
Under the new requirement, there were actuarial losses on 1 January 2012 in the amount of € 55,629 k,
which are to be recognised in other comprehensive income. After taxes the effect on equity will be
€ 41,938 k.
Due to the disappearance of the corridor method previously applied to amortisation of actuarial losses to
be recognised in the income statement and the required application of a uniform net interest component
the pre-tax earnings for fiscal 2012 improved by € 1,438 k. As a result on the one hand of this positive effect
on earnings, there will be an increase in the retained earnings of equity as at 31 December 2012. On the
other hand, the actuarial losses before taxes as of this reporting date amount to € 79,683 k, reducing other
comprehensive income and thus equity. After taxes the overall negative effect on equity will be one of
€ 61,542 k.
The amendments to IAS 19 also concern termination benefits and therefore also impact on the accounting
for partial retirement obligations, as the application note issued by the IFRS expert advisory panel of the
German Accounting Standards Committee (DRSC) clarified in December 2012. The most important changes
concern the accumulation of liability to pay to-up amounts. Unlike previously, the opinion is that top-up
funding does not normally involve payments relating to termination benefits, but rather other benefits due
to employees in the long term. The top-up amounts must be accumulated based on consideration of past
service cost. The Group is currently determining the impact.
■■
In December 2010, the IASB issued an amendment to IAS 12, Deferred Taxes: Recovery of Underlying Assets.
The amendment clarifies the determination of deferred tax on property measured at fair value and introduces a rebuttable presumption that deferred tax on investment property using the fair value model in
IAS 40 should be determined on the basis that its carrying amount will be recovered through sale. It includes
the requirement that deferred tax on non-depreciable assets that are measured using the revaluation model
in IAS 16 should always be measured on a sale basis. The amendment is effective in the EU for financial years
beginning on or after 1 January 2013. Earlier application is permitted. This change to IAS 12 is not expected
Company information
155
to have any effect on the Group’s financial position and performance.
■■
In May 2011, the IASB issued IFRS 13, Fair Value Measurement, which must be applied for the first time to
financial years beginning on or after 1 January 2013. The Standard establishes guidance for measuring fair
value and defines comprehensive quantitative and qualitative disclosures on measurement of fair value.
IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how
to measure fair value under IFRS when fair value is required or permitted. IFRS 13 defines fair value as the
price that an entity would receive to sell an asset or be paid to transfer a liability in an orderly transaction
material impact on the Group’s financial position or performance.
Furthermore in May 2011, with IFRS 10, Consolidated Financial Statements, IFRS 11, Joint Arrangements,
IFRS 12, Disclosure of Interest in Other Entities, as well as consequential amendments to IAS 27, Separate
Financial Statements, and IAS 28, Investments in Associates, the IASB issued updates and improvements
to the accounting and disclosure requirements concerning consolidation, joint arrangements or jointly
controlled entities as well as off-balance sheet activities. These requirements must each be applied in the
EU for the first time to financial years beginning on or after 1 January 2014, though the EU does permit early
application from 1 January 2013 in accordance with the IASB’s date of initial application.
-- IFRS 10, Consolidated Financial Statements, replaces the requirements under the previous IAS 27, Consolidated and Separate Financial Statements, on consolidated financial statements and SIC-12, Consolidation
– Special Purpose Entities. IFRS 10 establishes a single control model that applies to all entities including
special purpose entities.
-- IFRS 11, Joint Arrangements, replaces IAS 31, Interests in Joint Ventures, and the Interpretation SIC-13,
Jointly-controlled Entities – Non-monetary Contributions by Venturers. IFRS 11 removes the option to
account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet the
definition of a joint venture must be accounted for using the equity method.
-- IFRS 12, Disclosure of Interests in Other Entities, includes all the disclosures that were previously in IAS 27
related to consolidated financial statements, as well as all of the disclosures that were previously included
in IAS 31 and IAS 28. These disclosures relate to an entity’s interests in subsidiaries, joint arrangements,
associates and structured entities.
■■
between market participants at the measurement date. This new requirement is not expected to have any
156
-- The scope of IAS 27, Separate Financial Statements, (as revised in 2011) was, with adoption of IFRS 10 and
IFRS 12, limited to accounting for subsidiaries, jointly controlled entities and associates in separate financial statements.
-- As a consequence of the new IFRS 11 and IFRS 12, the scope of IAS 28 , Investments in Associates and Joint
Ventures (as revised in 2011), was extended, in addition to associates, also to application of the equity
method to investments in joint ventures.
These amendments are not expected to have any material effect on the Group’s financial position or performance.
■■
In October 2011, the IASB issued IFRIC Interpretation 20, Stripping Costs in the Production Phase of a Surface
Mine. The Interpretation applies to capitalisation of a non-current asset for the production stripping costs
incurred, provided the benefit lies in improved access to ore that can be mined in the future and that other
mandatory preconditions are met. The Interpretation is to be applied to financial years beginning on or after
31 December 2012. LEONI is not affected by these factors or requirements. They therefore have no impact
on the Group’s financial position or performance.
■■
In December 2011, the IASB issued amendments to IAS 32 and IFRS 7, Offsetting Financial Assets and
Financial Liabilities. The amendment addresses existing inconsistencies by an addition to the application
guidelines. The existing fundamental requirements on offsetting of financial instruments continue to apply, however. Additional disclosures are furthermore defined. These changes are to be applied for the first
time to financial years beginning on or after 1 January 2013. Their impact on the Group is currently being
determined.
B) The European Union (EU) has not yet endorsed the following accounting requirements issued by
either the IASB or IFRIC:
■■
In November 2009, the IASB issued IFRS 9, Financial Instruments, as the first step in its project to replace
IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 initially introduces only new requirements for classifying and measuring financial assets. Under this requirement financial assets must be accounted for either at amortised cost or at fair value through profit or loss depending on their characteristics
and taking into consideration the business models for managing financial assets. Equity instruments must
always be accounted for at fair value, but changes in value of equity instruments may be recorded in other
comprehensive income so far as this option was established upon their acquisition. The Standard is to be
effective for financial years beginning on or after 1 January 2015. The European Financial Reporting Advisory
Company information
157
Group has postponed its recommendation on endorsing this IFRS in the EU to take more time for appraising
the IASB project’s findings on improving recognition of financial instruments.
In October 2010, the IASB issued the second part of IFRS 9 with the new requirements for classifying and
measuring financial liabilities. In particular, these new requirements change the measurement of financial
liabilities that are measured through profit or loss by applying the fair value option. All other requirements
with respect to classifying and measuring financial liabilities were adopted in the new IFRS 9 unchanged
from IAS 39. These new requirements must be applied for the first time to financial years beginning on or
■■
In May 2012, the IASB issued Improvements to IFRSs 2009-2011. The requirement clarifies several existing
Standards and is to be applied to financial years beginning on or after 1 January 2013.
■■
In June 2012, the IASB issued a Transition Guidance providing additional transition relief in IFRS 10, IFRS 11
and IFRS 12, which is effective from 1 January 2013.
■■
after 1 January 2015.
A further addition or amendment to IFRS 10, IFRS 12 and IAS 27 with respect to Investment Entities was
issued on 31 October 2012, which is to be applied from 1 January 2014. Entities that qualify as an investment
entity as defined in this amended version of IFRS 10 are exempt from certain consolidation obligations.
Rather, they must account for their subsidiaries at fair value through profit or loss pursuant to IFRS 9, Financial Instruments.
Group is analysing the impact of these amended and new requirements. The current status of analysis does
not yet permit comment concerning the probable impact of the amended requirements on the Group’s financial position and performance.
Application of the above requirements will be binding in the future so far as they are endorsed by the EU. The
158
[ 4 ] Scope of consolidation
Along with LEONI AG, the consolidated financial statements account for 20 companies in Germany and 66
companies outside Germany in which LEONI AG is entitled, either directly or indirectly, to a majority of the voting rights. The scope of consolidation does not include any special-purpose entities pursuant to SIC 12 because
LEONI does not control any companies that were established for a special purpose without or with only limited
equity interest.
Number of fully consolidated companies
Germany
31/12/2012
31/12/2011
21
20
Outside
66
63
Total
87
83
Together with acquisition of the outstanding 50 percent equity in the South Korean company Daekyeung
T&G Co. Ltd., five companies were added outside Germany. However, as Daekyeung T&G Co. Ltd. was merged
with our already existing South Korean subsidiary LEONI Wiring Systems Korea Inc. based in Seoul, there was
a net addition of just four companies. In Germany, Roth-based LEONI Con-Tech GmbH, which acquired the
connector systems development operation of FCT electronik GmbH in Munich, was newly included within the
scope of consolidation. Our Swiss subsidiary LEONI Studer Hard AG, which was sold in March 2012, was deconsolidated. The acquisitions and disposals of subsidiaries are described in detail in Note 5.
The Dubai-based subsidiary LEONI Middle East FZE, newly established within the Wire & Cable Solutions
Division in the fourth quarter of 2012, was included within the scope of consolidation. The South African company LEONI Wiring Systems East London Ltd., of the Wiring Systems Division, had been in liquidation for some
time already and was also formally deconsolidated after its removal took legal effect in the past financial year.
A complete list of the fully consolidated subsidiaries as well as of the associates and joint ventures on
31 December 2012 is shown at the end of these notes.
[ 5 ] Acquisitions and disposals of subsidiaries
In the 2012 financial year:
On 4 January 2012, LEONI acquired the outstanding 50 percent of the shares in the South Korean joint
venture Daekyeung T&G Co. Ltd. based in Busan at a price of 39,000 million Korean won (KRW), of which
KRW 20,000 million, or € 13,532 k, was paid on the takeover date and KRW 19,000 million, € 13,562 k, was paid
in December 2012. The transferred consideration for the outstanding shares was € 24,301 k. Taking the acquired cash and cash equivalents totalling € 2,074 k as well as the payments of € 1,543 k received from hedging
the exchange rate into account, the cash consideration in the period under report was € 23,477 k. Transaction
costs in the amount of € 248 k were expensed in administrative costs. The South Korean company including
its four Chinese subsidiaries is allocated to the Wiring Systems Division and manufactures wiring systems par-
ticularly for customers General Motors, SsangYong and Volvo. The aim with this full takeover is to tap into the
South Korean automotive market more quickly and to forge ahead with incorporating the production facilities
into LEONI’s global production network.
Company information
159
The company was first consolidated upon gaining control over it at the time of acquisition, i.e. on 4 January 2012. Upon initial consolidation, the sum of consideration and the fair value of the existing shares in the
amount of € 48,602 k exceeded the acquired net identifiable assets and liabilities, which were likewise measured at their fair value. This resulted in goodwill amounting to € 6,359 k, which pertained to synergies, the staff
and new customer potential. The goodwill is not tax deductible. The overview below shows the fair value of
the acquired assets and liabilities on the date of initial consolidation.
Recognised at acquisition
Intangible assets
43,117
31,408
Inventories
36,669
Deferred taxes
Trade receivables
Other assets
1,266
18,805
2,074
6,647
[ € ‘000 ]
139,986
Deferred taxes
9,974
Financial debts
50,594
Trade liabilities
30,697
Provisions
Other liabilities
2,349
701
3,428
97,743
Fair value of net assets
42,243
Considerations
24,301
Fair value of the existing shares
24,301
42,243
Goodwill
6,359
The gross amount of acquired trade receivables was € 18,916 k, the write-down on which came to € 131 k.
These acquired companies contributed € 120,531 k to consolidated sales and incurred a loss of € 17,480 k to
consolidated net income. Measurement of the already existing shares at fair value resulted in income of
€ 2,721 k. Furthermore, an exchange gain, recognised in other comprehensive income until the takeover date,
on the existing shares in amount of € 2,232 k was recognised in the income statement. Both aforementioned
factors were recognised in other operating income.
Pension provisions
160
On 10 January 2012, Daekyeung T&G Co. Ltd. and our already existing South Korean subsidiary LEONI Wiring
Systems Korea Inc. based in Seoul were merged. The company bears the name LEONI Wiring Systems Korea
Inc. and is based in Busan.
On 1 May 2012, LEONI acquired the connector systems design operations of FCT electronik GmbH in Munich
in the context of an asset deal. LEONI took a significant strategic step towards systematically enhancing its
plug and connector systems expertise with this purchase. Along with the specific development know-how,
the Company gained a team of 11 specialists and experts for setting up its Business Unit Connectivity, which is
allocated to the Wiring Systems Division. The acquired business operation was first consolidated upon obtaining control on 1 May 2012. The overview below shows the fair values of the acquired assets and liabilities on
the date of acquisition. The purchase price, i.e. the transferred cash consideration, in the amount of € 1,023 k
exceeded the above figure by € 330 k, which meant reporting of goodwill that pertained to the acquired staff
and synergies.
[ € ‘000 ]
Intangible assets
513
194
707
Other liabilities
14
693
Goodwill
330
Transferred consideration
1,023
The activities did not contribute to consolidated sales, but added € 95 k to consolidated net income.
The following overview shows the consideration pertaining to the acquisitions accounted for in fiscal 2012 as
well as the related cash amounts:
Transferred consideration
of which paid in cash
Difference
1,023
1,023
0
Daekyeung T&G Co. Ltd.
24,301
23,477
824
Total
25,324
24,500
824
[ € ‘000 ]
LEONI Con-Tech
(Asset Deal with FCT electronic GmbH, Munich)
On 19 March 2012, LEONI sold all the shares in its Swiss subsidiary LEONI Studer Hard AG, which was allocated
to the Wire & Cable Solutions Division. The company was, at the beginning of 2012, focused on the sterilisation business, which included radiation of medical products, drugs and packaging. The sterilisation business
generated sales of about € 8.4 million in the past year of 2011. The subsidiary was deconsolidated on the day
of its disposal as control over it also passed to the purchaser on this date. The consideration to be paid by the
purchaser amounted to € 51,031 k, which involved a purchase price adjustment of € 1,346 k being considered
in the second and third quarter. From the sale the Group recognised a gain on deconsolidation of € 28,316 k in
other comprehensive income. This included an exchange gain in the amount of € 9,943 k, which was reclassi-
Company information
161
fied from other comprehensive income to the income statement. The overview below shows the deconsolidated assets and liabilities.
Intangible assets
Deconsolidated
upon disposal
434
Goodwill
10,320
27,243
Inventories
Trade receivables
Other assets
21
812
43
634
39,507
Other liabilities
631
Pension provisions
316
Other provisions
Deferred taxes
Trade liabilities
[ € ‘000 ]
748
3,621
1,533
6,849
32,658
Consideration received
51,031
Gain on disposal
18,373
The Group took in a payment of € 51,031 k from its sale of LEONI Studer Hard AG, which therefore, when taking
the deconsolidated cash and cash equivalents amounting to € 43 k into account, provided the Group with cash
of € 50,988 k.
In the 2011 financial year:
An option contract that entitled LEONI to acquire the remaining 49 percent of the shares in the glass fiber
producer j-fiber GmbH of Jena between 1 January and 31 October 2011 required this company, as well as its
two subsidiaries, to be consolidated as early as from 1 January 2011. The contract gave LEONI potential voting
rights, which, together with the already existing voting rights, made consolidation mandatory from the beginning of the 2011 financial year depending on whether LEONI exercises the option to acquire the outstanding
shares, which was ultimately the case in the fourth quarter of 2011. Based on applying the requirements under
IFRS 3, the company was therefore first included in the consolidated financial statements and allocated to the
Carrying amount of the net assets
162
Wire & Cable Solutions Division from 1 January 2011. The terms of the option contract did not require any noncontrolling interests to be reported, but rather the liability arising from the option contract to be recognised.
j-fiber GmbH is among Europe’s leading suppliers of optical glass fibers, which are used above all in cables
for telecommunications and data communications. Its subsidiary, j-plasma GmbH, is focused on manufacturing what are known as special preforms (glass blocks), which are processed into glass fibers for sophisticated
applications in sensor, medical and laser technology.
Upon initial consolidation of the j-fiber Group, the sum of the consideration stipulated in the option contract
(exercise price) and the fair value of the existing shares in the amount of € 3,171 k exceeded the acquired net
identifiable assets and liabilities, which were likewise measured at their fair value. This resulted in non-tax
deductable goodwill amounting to € 1,280 k, pertaining primarily to the workforce, expected synergies and
the increase in the Group’s vertical range of manufacture. Measurement of the shares already held at fair value
resulted in income of € 676 k, which was recognised in the income statement as other operating income.
The overview below shows the fair value of the acquired assets and liabilities on the date of initial
consolidation.
[ € ‘000 ]
Intangible assets
3,602
1,618
Inventories
3,572
Trade receivables
2,640
110
Other assets
366
11,908
Deferred taxes
655
Financial debts
6,984
Trade liabilities
1,366
Provisions
214
Other liabilities
798
10,017
1,891
Consideration arising from option contract
2,100
Fair value of the existing shares
1,071
1,891
Goodwill
1,280
The transferred consideration thus amounted to € 2,100 k. Taking the acquired cash and cash equivalents totalling € 110 k into account, the cash consideration was € 1,990 k.
The acquired trade receivables were written down by € 112 k. These companies contributed € 15,714 k to
consolidated sales and € 23 k to consolidated net income in fiscal 2011.
[ 6 ] Other operating income and other operating expenses
The other operating income in the amount of € 48,890 k (previous year: € 9,917 k) included the gain on
Company information
163
disposal of LEONI Studer Hard AG in the amount of € 18,373 and income of € 2,721 k from measurement at fair
value of the shares already held in Daekyeung T&G Co. Ltd. prior to the takeover (cf. Note 5). In the previous
year, remeasurement of the existing share in j-fiber GmbH resulted in recognition of € 676 k in other operating
income (cf. also Note 5).
Also included was a positive currency result of € 8,168 k (previous year: an exchange loss of € 2,787 k), which
was attributable mainly to the exchange gains on the two aforementioned transactions reclassified from other
comprehensive income to the income statement. Combined with the exchange gains on financing activity in
the amount of € 3,457 k (previous year: a loss of € 239 k), which were included in finance costs, there was an
The other operating income also comprised book profits from the disposal of assets in the amount of
€ 4,957 k (previous year: € 749 k), which pertained to the Wire & Cable Solutions Division in the amount of
€ 3,075 k (previous year: € 370 k) and to the Wiring Systems Division in the amount of € 1,921 k (previous year:
€ 380 k), as well as government grants in the amount of € 7,670 k (previous year: € 3,190 k and compensation
payments of € 1,110 k in China), which, as in the previous year, pertained almost exclusively to the Wiring
Systems Division. More detailed explanation of this is to be found in Note 7.
exchange gain totalling € 11,625 k (previous year: an exchange loss of € 3,026 k).
The reversal of restructuring provisions and liabilities provided income amounting to € 2,154 k (previous
year: € 1,056 k), of which € 249 k (previous year: € 376 k) pertained to the Wire & Cable Solutions Division and
€ 1,905 k (previous year: € 680 k) to the Wiring Systems Division.
The other operating expenses of € 16,955 k (previous year: € 14,856 k) included restructuring expenses
amounting to € 9,543 k (previous year: € 2,409 k) and costs pertaining to the sale of receivables amounting to
€ 2,979 k (previous year: € 3,785 k). The restructuring expenses pertained in the amount of € 907 k (previous
k) to the Wiring Systems Division. This involved primarily spending on severance, which also includes the
additions to restructuring provisions (cf. explanations in Note 23 in this regard). In the Wire & Cable Solutions
Division this involved measures almost exclusively at German production facilities. In the Wiring Systems
Division this mainly concerned production sites in Tunisia, Spain, Slovakia, Morocco and China (Weihai) due to
the acquisition of Daekyeung. The restructuring expenses relate to the cost of sales in the amount of € 8,801 k
(previous year: € 1,330 k), to selling expenses in the amount of € 80 k (previous year: € 160 k), to general administrative costs in the amount of € 424 k (previous year: € 919 k) as well as to research and development costs in
the amount to € 238 k (previous year: € 0 k).
[ 7 ] Government grants
The Group obtained performance-related government grants totalling € 10,114 k in fiscal 2012 (previous year:
€ 6,428 k). In the amount of € 2,444 k (previous year: € 3,234 k) this involved mainly allowances for part-time
working for older employees and grants for research and development work. This income was directly offset
in the income statement with the expenses incurred. In the amount of € 7,670 k (previous year: € 3,194 k) this
year: € 1,202 k) to the Wire & Cable Solutions Division and in the amount of € 8,636 k (previous year: € 1,207
164
involved primarily government grants for building a new plant and the related creation and three-year retention of jobs in Serbia as well as performance-related government grants to promote export business in Egypt
and China. The income from these grants is recognised in other operating income (cf. Note 6).
Government grants for capital investment in property, plant and equipment in the amount of € 485 k
(previous year: € 1,293 k) were recognised in fiscal 2012. These were deducted from the costs to purchase and
manufacture the related property, plant and equipment.
[ 8 ] Finance revenue and costs
The finance revenues in the amount of € 4,729 k (previous year: € 1,814 k) involved exchange gains amounting
to € 3,457 k (previous year: € 0 k) and interest income of € 1,272 k (previous year: € 1,814 k). As in the previous
year, all interest income was computed on the basis of the effective interest rate method.
Finance costs broke down as follows:
[ € ‘000 ]
Interest expenses
2012
2011
38,164
39,427
Finance cost from pension obligations
3,475
2,443
Interest expense from measurement of other provisions
1,152
687
Exchange losses
Finance cost
0
239
42,791
42,796
The finance costs included interest expenses of € 30,091 k (previous year: € 32,233 k) that were computed on
the basis of the effective interest rate method.
[ 9 ] Income taxes
Taxes on income including deferred taxes break down as follows for fiscal 2012 and fiscal 2011:
2012
2011
Current taxes
49,764
40,065
Deferred taxes
(7,897)
226
Income taxes
41,867
40,291
[ € ‘000 ]
In the 2012 financial year, the Group recorded tax expenses of € 41,867 k (previous year: € 40,291 k) in the
income statement. Tax expense of € 3,716 k (previous year: € 1,436 k tax income) was recognised in other
comprehensive income.
Deferred tax assets and liabilities should be measured at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled. For the Group’s German companies, the deferred taxes on
31 December 2012 were calculated using a corporate tax rate of 15 percent, unchanged from the previous year,
Company information
165
for all temporary differences. Again included was a solidarity surcharge of 5.5 percent (previous year: 5.5 percent) on the corporate tax plus an average trade tax rate of 13.0 percent (previous year: 13.0 percent). Including
the impact of the solidarity surcharge and the trade tax, the tax rate applied to calculate deferred taxes for
German companies thus amounted to a combined 28.9 percent (previous year: 28.9 percent). For non-German
companies the country-specific, respective tax rates were used.
In the financial year, changes to foreign tax rates were recognised in the income statement in the amount
of € 2,209 k (previous year: € 374 k), which pertained mainly to a Chinese subsidiary. In the previous year, the
amount recognised in the income statement concerned subsidiaries in Mexico, Slovakia and the Ukraine; in the
takes the impact of each of these tax rate changes into account.
The following table reconciles the statutory income tax expense to the effective income taxes presented in
the financial statements for the respective financial year. To calculate the projected income tax expense we
multiplied the pre-tax earnings by the combined income tax rate in Germany of 28.9 percent (previous year:
28.9 percent) applicable to the financial year.
2011
[ € ‘000 ]
[%]
[ € ‘000 ]
57,190
28.9
56,716
28.9
Foreign tax rate differentials
(17,881)
(9.0)
(10,310)
(5.3)
Change in tax rate / tax law
(2,209)
(1.1)
(374)
(0.2)
Change in valuation allowances on deferred tax assets
(2,697)
(1.3)
(9,068)
(4.6)
1,808
0.9
3,372
1.7
35
0.0
2,041
1.0
Expected tax expense (2012: 28.9 %; 2011: 28.9 %)
Non-deductible expenses
Result from entities accounted for under the equity method
[%]
Prior-period tax expense
4,212
2.1
(3,306)
(1.7)
Other
1,409
0.7
1,220
0.7
41,867
21.2
40,291
20.5
Effective income taxes / tax rate
The change in valuation allowances on deferred tax assets in the negative amount of € 2,697 k (previous year:
negative € 9,068 k) involved tax assets not deferred in the amount of € 2,840 k (previous year: € 2,738 k). As in
the previous year, these valuation allowances concerned primarily deferred tax assets from loss carryforwards
to the extent it is considered more likely than not that such benefits will be used in future years. In determining
the valuation allowance all factors including legal factors and information available were taken into account.
The change in valuation allowances included reversal of valuation allowances on deferred tax assets with
effect on the income statement in the negative amount of € 5,482 k (previous year: a negative amount of
€ 5,815 k). The item included a negative amount of € 55 k (previous year: negative € 5,991 k) for the use of loss
carryforwards for which no tax assets were recognised in the previous years.
2012
United Kingdom and France as well as in the United States, Switzerland and China. The reconciliation below
166
The deferred tax assets and deferred tax liabilities were derived from temporary differences recorded under
the following balance sheet items as well as tax loss carryforwards:
LEONI AG
Consolidated statement
of financial position
LEONI AG
2012
2011
Inventories
9,216
6,768
1,996
914
Accounts receivable and other assets
4,064
7,156
(1,266)
(2,299)
3,899
3,278
553
(2,265)
Intangible assets
1,219
1,878
(384)
88
[ € ‘000 ]
Non-current financial assets
2012
2011
488
654
(190)
142
Tax loss carryforwards
51,670
44,192
5,206
(24,358)
Liabilities and provisions
18,536
25,622
(5,695)
6,933
5,483
5,003
270
322
670
14,599
1,241
Pension provisions
Total
Valuation allowance
Deferred tax assets (before offsetting)
Inventories
94,575
94,551
(30,993)
(30,658)
63,582
63,893
9,283
10,392
922
4,842
4,002
(475)
4
27,433
29,805
233
(820)
Intangible assets
23,440
17,448
3,775
6,590
Non-current financial assets
6,252
5,909
(240)
(181)
Liabilities and provisions
5,832
8,778
2,764
(1,128)
765
390
(242)
(8)
77,847
76,724
7,897
(226)
Pension provisions
Deferred tax liabilities (before offsetting)
Deferred tax income / expense
Net deferred tax assets / tax liabilities
(14,265)
(12,831)
No deferred tax assets on temporary differences and tax loss carryforwards were recognised in the amount of
€ 30,993 k (previous year: € 30,658 k).
The net amount of deferred tax assets and liabilities was derived as follows:
2012
[ € ‘000 ]
2011
Deferred tax assets
68,860
63,910
Valuation allowance
(30,993)
(30,658)
37,867
33,252
Net deferred tax assets
Deferred tax liabilities
Net deferred tax assets / tax liabilities
52,132
46,083
(14,265)
(12,831)
Company information
167
Deferred taxes on outside basis differences (differences between the net assets including goodwill of the subsidiaries and the respective tax value of the shares in these subsidiaries) were not recognised because reversal
to be expected in the foreseeable future. Outside basis differences amounted to € 180,817 k on 31 December
2012 (previous year: € 184,663 k).
On the balance sheet date the Group had mainly foreign income tax but also German corporate tax loss
carryforwards totalling € 185,959 k (previous year: € 152,650 k), of which € 70,358 k (previous year: € 78,419 k)
may, based on legislation applicable on the respective reporting date, be carried forward indefinitely and in
unlimited amounts. However, losses carried forward in Germany from the 2004 tax-assessment year and in
of differences arising for example from dividend payments can be managed and no material tax effects are
France from the 2011 tax-assessment year may be deducted from income without restriction up to € 1,000 k
only. Any remaining amount of income may be offset by loss carryforwards by up to 60 percent. The remaining
tax losses eligible for limited carryforward pertained exclusively to foreign subsidiaries and will expire by 2027
at the latest if not utilised. The table below shows the usability of the loss carryforwards:
Useable until
2013
25,272
Useable until
2014
10,167
Useable until
2015
9,358
Useable until
2016
8,403
Useable until
2017
1,466
Useable until
2018
429
Useable until
2019
931
Useable until
2020
1,887
Useable until
2021
7,895
Useable until
2022
22,834
Useable until
2023
6,018
Useable until
2024
19,382
Useable until
2025
81
Useable until
2026
212
Useable until
2027
1,267
2012
[ € ‘000 ]
168
The Group’s German trade tax loss carryforwards amounted to € 7,643 k on the balance sheet date (previous
year: € 12,298 k), all of which, based on legislation applicable on the respective balance sheet dates, may be
carried forward indefinitely and in unlimited amounts. The options to offset against future income correspond
to the corporate tax loss carryforwards.
In the financial year, German trade tax loss carryforwards amounting to € 4,666 k (previous year: € 38,897 k)
and German corporate tax loss carryforwards amounting to € 1,683 k (previous year: € 33,304 k) were utilised.
Foreign income tax loss carryforwards amounting to € 9,289 k (previous year: € 22,683 k) and foreign trade
tax loss carryforwards for allowable income taxes in the amount of € 5,551 k (previous year: € 2,726 k) were
utilised.
[ 10 ] Other comprehensive income
The overview below shows the components of other comprehensive income and the tax effects:
01/01/ – 31/12/2012
[ € ‘000 ]
Foreign currency translation adjustments
Pre-tax
amount
Tax effect
(3,442)
Net amount
Tax effect
Net amount
(2)
(3,444)
9,588
16
9,604
137
(30)
107
0
0
0
9,930
(3,684)
6,246
(2,193)
1,420
(773)
(2,279)
0
(2,279)
426
0
426
4,346
(3,716)
630
7,821
1,436
9,257
Change in fair value of securities
(available-for-sale financial assets)
Change in unrealised gains /
losses on cash flow hedges
Change in the share of other comprehensive
income accounted for by associates and
joint ventures
01/01/ – 31/12/2011
Pre-tax
amount
[ 11 ] Accounts receivable and other financial assets
as well as long-term receivables from development contracts
[ € ‘000 ]
Trade receivables
Accounts receivable from associated companies and joint ventures
Other financial assets
Non-current trade receivables from development contracts
2012
2011
460,422
433,695
0
2,353
17,726
20,793
478,148
456,841
41,826
39,492
Trade receivables were non-interest bearing. On the balance sheet date, trade receivables were reduced by
factoring amounting to € 91,325 k (previous year: € 117,986 k). The interest on factoring amounted to € 2,079 k
(previous year: € 2,709 k) and the factoring charges came to € 900 k (previous year: € 1,076 k).
Company information
169
The trade receivables pertaining to development orders involved customer-specific development contracts
accounted for in accordance with IAS 11. The sales for the financial year include revenue amounting to
€ 15,193 k (previous year: € 12,276 k) from such development orders. The expenses recognised corresponded to
the sales.
2012
2011
10,252
11,678
Change in scope of consolidation
139
50
Currency translation adjustments
22
32
[ € ‘000 ]
Allowance as of 1 January
Additions (allowances recognised as expense)
2,587
3,884
Usage
(3,404)
(2,123)
Reversal
(2,441)
(3,269)
7,155
10,252
Allowance as of 31 December
The allowances for trade receivables were as follows:
There were no allowances for long-term receivables from development contracts in either the financial year
under report or the previous one.
The table below shows current and non-current financial receivables that, on the balance sheet date, were
neither impaired nor overdue as well as overdue receivables that were not impaired:
Less than
30 days
Between
30 and
60 days
Between
61 and
90 days
Between
91 and
180 days
Between
181 and
360 days
of which:
not impaired on the reporting date and
passed due in the following periods
More than
360 days
31/12/2012
Trade receivables
460,422
401,342
35,529
11,821
3,393
7,167
1,885
375
Long-term trade receivables
from development contracts
41,826
41,826
0
0
0
0
0
0
Other financial receivables
19,277
18,135
584
102
81
4
98
273
31/12/2011
Trade receivables
433,695
386,499
31,448
8,346
4,364
2,161
894
936
Long-term trade receivables
from development contracts
39,492
39,492
0
0
0
0
0
0
21,985
20,560
236
271
412
438
37
31
[ € ‘000 ]
Carrying
amount
of which:
neither
impaired nor
passed due on
the reporting
date
170
The maximum risk of loan default corresponded to the carrying amount of the receivables. There were not,
with respect to the neither impaired receivables nor the overdue receivables, any signs on the reporting date
that the debtors will fail to make payment.
Receivables were covered by credit insurance in the amount of € 115,969 k (previous year: € 134,322 k).
[ 12 ] Other assets
2012
2011
51,698
45,945
Prepaid expenses
16,451
11,555
Advanced payment
10,426
6,800
Insurance technical reserves
3,785
4,500
Receivables for other taxes
2,826
2,509
Other assets
4,475
5,546
89,661
76,855
[ € ‘000 ]
Receivables for VAT
[ 13 ] Inventories
[ € ‘000 ]
Raw materials and manufacturing supplies
Work in progress
Finished products and merchandise
2012
2011
210,576
194,875
88,011
86,162
189,948
177,936
488,535
458,973
The amount of impairment of inventories, recognised as expense, is € 15,347 k (previous year: € 15,299 k). As in
the previous year, the fiscal 2012 write-downs on inventory were fully included in the cost of sales.
The inventory recognised as expense in the cost of sales (inventory used) in the financial year amounted to
€ 2,294,370 k (previous year: € 2,238,455 k).
The carrying amount included inventories in the amount of € 30,027 k (previous year: € 44,712 k) that were
measured at net realisable value.
Land,
leasehold rights
and buildings
Technical
equipment, plant
and machinery
Other equipment,
factory and
other equipment
Advance payments
and assets under
construction
Total
Net book value on 1 January 2011
222,191
271,572
50,437
41,413
585,613
Acquisition costs on 1 January 2011
324,848
688,871
178,687
41,473
1,233,879
662
3,106
342
123
4,233
7,957
34,292
15,820
70,703
128,772
0
1,482
133
3
1,618
3,177
14,856
9,954
587
28,574
[ € ‘000 ]
Currency differences
Additions
Add. due to changes in scope of consolidation
Disposals
9,758
45,968
7,397
(63,123)
0
31 December 2011
Transfers
340,048
758,863
192,425
48,592
1,339,928
Accumulated depreciation on 1 January 2011
102,657
417,299
128,250
60
648,266
118
1,126
186
(4)
1,426
11,212
58,942
17,175
0
87,329
0
1,508
0
0
1,508
Additions
Impairment loss
1,719
13,814
9,016
0
24,549
31 December 2011
Disposals
112,268
465,061
136,595
56
713,980
Net book value on 31 December 2011
227,780
293,802
55,830
48,536
625,948
340,048
758,863
192,425
48,592
1,339,928
2,243
1,792
225
(14)
4,246
Additions
20,270
53,362
17,725
55,359
146,716
12,202
13,062
4,771
1,568
31,603
Disposals
3,683
30,229
10,000
156
44,068
13,569
19,241
1,007
833
34,650
3,832
43,707
7,675
(55,214)
0
31 December 2012
361,343
821,316
211,814
49,302
1,443,775
Accumulated depreciation on 1 January 2012
112,268
465,061
136,595
56
713,980
Disposals due to changes in scope of consolidation
Transfers
313
1,181
165
(5)
1,654
Additions
12,648
63,562
19,834
0
96,044
Disposals
1,645
27,227
8,870
0
37,742
1,467
5,824
116
0
7,407
122,117
496,753
147,608
51
766,529
239,226
324,563
64,206
49,251
677,246
31 December 2012
[ 14 ] Property, plant and equipment
Company information
171
172
No interest (previous year: € 13 k) was capitalised in the financial year. The underlying interest rates conformed
to the local circumstances of the respective country.
Government grants to spend on property, plant and equipment amounting to € 485 k (previous year:
€ 1,293 k) were deducted from costs.
Unlike in the previous year, no write-downs on property, plant and equipment were incurred in the financial
year. In the previous year, € 1,508 k was recognised in the cost of sales for technical equipment at one of our
Wire & Cable Solutions Division’s Chinese facilities because the equipment could no longer be used or sold.
There was no appreciation either in this financial year or in the previous year.
The Group received compensation of € 33 k (previous year: € 1,501 k) for property, plant and equipment lost
and decommissioned.
Company information
173
[ 15 ] Intangible assets
Development costs
Advance
payments
Total
Net book value on 1 January 2011
21,492
47,734
2,172
1,796
73,194
72,804
89,418
9,487
1,923
173,632
246
64
255
3
568
Additions
6,543
0
0
2,123
8,666
2,804
798
0
0
3,602
819
872
92
65
1,848
Disposals
1,373
0
256
(1,629)
0
31 December 2011
Transfers
82,951
89,408
9,906
2,355
184,620
Accumulated amortisation on 1 January 2011
51,312
41,684
7,315
127
100,438
Additions
Impairment loss
Disposals
149
47
219
0
415
6,799
12,435
482
0
19,716
0
6,600
0
0
6,600
750
872
11
0
1,633
31 December 2011
57,510
59,894
8,005
127
125,536
25,441
29,514
1,901
2,228
59,084
82,951
89,408
9,906
2,355
184,620
195
2,037
196
16
2,444
4,453
0
0
3,046
7,499
931
42,700
0
0
43,631
1,126
0
115
0
1,241
955
1,921
0
0
2,876
1,691
0
312
(2,003)
0
31 December 2012
88,140
132,224
10,299
3,414
234,077
Accumulated amortisation on 1 January 2012
57,510
59,894
8,005
127
125,536
Additions
Disposals
Transfers
189
200
183
0
572
Additions
7,191
12,498
469
0
20,158
Disposals
773
0
66
0
839
521
1,921
0
0
2,442
31 December 2012
63,596
70,671
8,591
127
142,985
24,544
61,553
1,708
3,287
91,092
Customer
relationships and
order backlog
[ € ‘000 ]
Trademarks,
similar rights,
software and others
174
The item trademarks and similar rights, software and others included mainly technology as well as nonpatented production know-how acquired in the context of business combinations. The residual value of
the technology and the production know-how amounted to € 9,217 k (previous year: € 9,599 k); the average
residual useful life is 9.6 years. Also included were brands acquired in the context of business combinations in
the amount of € 2,128 k (previous year: € 2,128 k), which were classified as intangible assets with an indefinite
useful life as there was no foreseeable limit to the use of these brands. The contractual and non-contractual
business relationships obtained in the context of business acquisitions under the item customer relationships
and order backlog have a residual value of € 61,553 k (previous year: € 29,513 k), the average residual useful life
of which was 7.3 years.
Amortisation of intangible assets with a finite useful life was included in the cost of sales in the amount of
€ 14,510 k (previous year: € 13,882 k), in selling expenses in the amount of € 668 k (previous year: € 945 k), in
general and administrative expenses in the amount of € 4,298 k (previous year: € 3,953 k) as well as in research
and development costs in the amount of € 681 k (previous year: € 938 k).
Intangible assets with an indefinite useful life were, just as the goodwill, tested for impairment as at
31 October. This involved two brands in the Wire & Cable Solutions Division, specifically in one cash-generating unit in each of Business Group Communication & Infrastructure and Business Group Industry & Healthcare.
The impairment tests based the recoverable amount on the value in use. The underlying cash flow forecasts
are in each case based on the five-year business planning as approved by the Management Board. The cash
flow planning was as a matter of principle on a bottom-up basis from the individual planning of the operating
units. It took into account price agreements based on experience and anticipated efficiency enhancements
as well as a sales trend based on the strategic outlook. The cash flows after the five-year period were, in the
case of the brand in Business Group Communication & Infrastructure, as in the previous year extrapolated by
applying a zero growth rate. The pre-tax discount rate applied was 13.29 percent (previous year: 11.72 percent).
In the case of the brand in Business Group Industry & Healthcare, a pre-tax discount rate of 12.07 percent
(previous year: 11.98 percent) was applied for the five-year detailed planning period and thereafter one of
11.07 percent (previous year: 11.98 percent), which corresponds to a growth rate of one percent after the fiveyear planning period. Neither impairment test resulted in any need for write-down. In the case of the brand in
Business Group Industry & Healthcare, the value in use exceeded the carrying amount of € 13.2 million by just
€ 1.2 million. An increase in the pre-tax discount rate by more than 0.95 of a percentage point would, all other
parameters being equal, take the value in use of the cash-generating unit below its carrying amount.
No write-downs on intangible assets were recognised in the 2012 financial year. In the previous year,
impairment cost of € 6,600 k, by far the largest proportion of which pertained to customer relationships, was
recognised in the cost of sales in the Wiring Systems Division.
There was no appreciation either in this financial year or in the previous year.
Company information
175
[ 16 ] Goodwill
Goodwill in the financial year is summarised as follows:
Accumulated allowance
2012
2011
160,818
158,977
8,157
8,167
152,661
150,810
Additions
6,689
1,280
Disposal
10,573
0
576
571
Carrying amount on 31 December
149,353
152,661
Acquisition costs on 31 December
157,522
160,818
Carrying amount 1 January
Currency translation differences
Accumulated allowance on 31 December
Carrying amount on 31 December
8,169
8,157
149,353
152,661
The goodwill shown on 31 December 2012 broke down to € 69,970 k (previous year: € 80,051 k) for the Wire
[ € ‘000 ]
Acquisition costs on 1 January
& Cable Solutions Division and € 79,383 k (previous year: € 72,610 k) for the Wiring Systems Division. The
goodwill existing in the Wire & Cable Solutions Division as at 31 December 2012 stems from the following key
acquisitions: € 18,241 k LEONI Schweiz AG (formerly Studer AG), € 12,841 k LEONI Special Cables GmbH,
€ 8,992 k LEONI Silitherm S.r.l., € 7,530 k LEONI Kablesysteme GmbH (formerly Klink + Öchsle GmbH and
neumatic Elektronik + Kabeltechnik GmbH & Co. KG) and € 6,899 k LEONI elocab GmbH. In the Wiring Systems
Division the largest amount of goodwill, € 67,396 k, stems from the acquisition of Valeo Connective Systems,
The additions in the amount of € 6,689 k (previous year: € 1,280 k) pertained to the South Korean Daekyeung T&G Co. Ltd. company as well as the development operation of the FCT electronic GmbH company
acquired during the financial year. The disposals involved the sold subsidiary LEONI Studer Hard AG in the
amount of € 10,320 k and closure of the plant in Weihai, China in the amount of € 253 k (cf. also Note 5 on the
additions and disposals).
In addition to the obligatory impairment tests of all goodwill that must be carried out at least once a year,
the Company carries out additional impairment tests during the financial year where there are indications of
impairment.
while € 6,318 k pertains to Daekyeung T&G Co. Ltd.
176
The obligatory impairment test of all goodwill that must be carried out at least once a year was executed as at
31 October.
For the purpose of the impairment test, all goodwill was allocated to the cash-generating units or groups
of cash-generating units that benefit from the synergies of the business combination. The principal goodwill
allocations were as follows:
In the Wiring Systems Division, the largest item of goodwill in the amount of € 67.4 million (previous year:
€ 67.4 million) was allocated at segment level.
In the Wire & Cable Solutions Division, goodwill totalling € 37.0 million (previous year: € 36.9 million) was
allocated to Business Group Industry & Healthcare. Goodwill totalling € 28.8 million (previous year: € 38.9 million) was allocated to Business Group Communication & Infrastructure and € 4.2 million (previous year:
€ 4.2 million) to Business Group Automotive Cables.
In all the goodwill impairment tests, determination of the recoverable amount was based on the value in
use. The underlying cash flow forecasts are in each case based on the five-year business planning as approved
by the Management Board. The cash flow planning is as a matter of principle on a bottom-up basis from
the individual planning of the operating units. The planning is based among other things on the unit sales
announced by the carmakers. Furthermore, it takes into account price agreements based on experience and
anticipated efficiency enhancements as well as a sales trend based on the strategic outlook. As in the previous
year, cash flows after the five-year period were in each case extrapolated by applying a zero growth rate. The
pre-tax discount rates applied were as follows: for the Wiring Systems Division 13.71 percent (previous year:
11.66 percent), for Business Group Automotive Cables 14.97 percent (previous year: 12.17 percent), for Business
Group Industry & Healthcare 12.81 percent (previous year: 10.92 percent) and for Business Group Communication & Infrastructure 12.46 percent (previous year: 10.79 percent).
The test for impairment of goodwill found no need for write-down.
The Group’s management holds the basic view that, by prudent judgment, any fundamentally possible
change to basic assumptions for determining the value in use of the cash-generating units or groups of cashgenerating units to which goodwill has been allocated would not lead to the carrying amounts of the cashgenerating units exceeding their recoverable amount. There is one exception in the Wiring Systems Division.
Here it could be in the case of one cash-generating unit, to which goodwill in the amount of € 6.3 million has
been allocated, that the carrying amount exceeds the value in use as a result of an increase in the discount rate
or if earnings projections worsen. Based on the assumptions made, the value in use of this cash-generating
unit exceeded its carrying amount of € 151.5 million by € 21.7 million. From an increase in the discount rate
by 1.59 percentage points the value in use would, all other parameters being equal, be below the carrying
amount.
Company information
177
[ 17 ] Shares in associated companies and joint ventures
The carrying amount of investments in associated companies and joint ventures was € 715 k (previous year:
€ 22,416 k), having come down due to consolidation in full of Daekyeung T&G Co. Ltd. after acquisition of the
outstanding 50 percent of the shares in the company.
Expenses from associated companies and joint ventures
2012
2011
1
1
(122)
(7,072)
(121)
(7,071)
In the previous year the expenses of € 7,071 k pertained primarily to the Korean joint venture Daekyeung T&G
Co. Ltd. and were incurred mainly by setting up the new plant in Jining.
The following overview shows the 100 percent values for the assets and liabilities as well as the income,
expenses and annual earnings of the associates and joint ventures:
[ € ‘000 ]
2012
Current assets
3,259
62,824
605
34,558
1,620
85,718
569
2,609
Non-current assets
Current liabilities
Non-current liabilities
2011
Equity
1,675
9,055
Total assets
3,864
97,382
Sales
6,752
92,230
111
2,599
Expenses
7,058
108,967
Net loss/income
(195)
(14,138)
Other income
On 31 December 2012, the joint ventures had lease payment obligation amounting to € 536 k (previous year:
€ 1,484 k). Due to purchase order commitments there were financial obligations amounting to € 20 k (previous
year: € 0 k). € 268 k and € 10 k of these respective amounts applied to LEONI in line with its shareholdings in
these joint ventures (previous year: € 742 k and € 0 k).
[ € ‘000 ]
Income from associated companies and joint ventures
The income and expenses from associated companies and joint ventures break down as follows:
178
[ 18 ] Other non-current financial assets
The other non-current financial assets amounting to € 1,313 k (previous year: € 1,104 k) comprised investments
classified as available-for-sale securities. They were valued at cost when there was no quoted price in an active
market and their fair value could not be reliably measured. Investments in the amount of € 247 k were measured at their fair value based on their market value.
The item also included loans to third parties and staff in the amount of € 2,535 k (previous year: € 2,580 k)
and collateral, pertaining mostly to rental deposits for office and warehouse buildings as well as staff residential units, in the amount of € 2,643 k (previous year: € 644 k).
[ 19 ] Other (non-current) assets
This item comprised mainly the prepaid pension cost amounting to € 11,957 k (previous year: € 11,967 k).
[ 20 ] Financial debts
The financial liabilities comprised bonds, liabilities to banks, notes payable and other loan obligations. They
totalled € 547,493 k (previous year: € 599,917 k), of which € 276,648 k (previous year: € 493,569 k) was noncurrent.
As in the previous year, the financial debts comprised a number of borrower’s note loans. In September of
the 2012 financial year LEONI placed a new borrower’s note loan in the amount of € 250,000 k, which is split
into seven tranches with five, six, seven and ten-year maturities. Existing borrower’s note loans in the amount
of € 234,500 k were repaid, of which € 229,500 k prematurely. The prematurely repaid borrower’s note loans
would normally have matured in March 2013, September 2014 as well as in March and June of 2015.
The overview below shows the existing borrower’s note loans:
Nominal value
Carrying amount
31/12/2012
[ € ‘000 ]
[ € ‘000 ]
Payment year
Repayment
Interest
Interest rate
hedging instrument
24,000
24,904
2008
matures 2013
fixed income
none
26,500
27,508
2008
matures 2015
fixed income
none
63,000
63,217
2012
matures 2017
fixed income
none
73,000
73,165
2012
matures 2017
variable rate
none
25,000
25,110
2012
matures 2018
fixed income
none
12,000
12,032
2012
matures 2018
variable rate
none
48,500
48,765
2012
matures 2019
fixed income
none
19,500
19,562
2012
matures 2019
variable rate
none
9,000
9,069
2012
matures 2022
fixed income
none
Likewise as in the previous year, the financial debts include a bond issued by LEONI AG in July 2006 in the nominal amount of € 200 million. The bond is due for repayment in July 2013 and was therefore, in the 2012 financial
year, presented under the item current financial liabilities and the short-term proportion of long-term loans. Due
Company information
179
to the repayment of short-term financial debts, however, the item increased by just € 164,497 k.
Detail of the financial liabilities and hedging instruments is to be found in Note 27.
[ € ‘000 ]
Trade liabilities
Liabilities to associated companies and joint ventures
Other liabilities
2012
2011
594,680
562,703
321
324
44,375
45,144
639,376
608,171
Other liabilities included liabilities amounting to € 32,283 k (previous year: € 20,568 k) from the receipt of payment on receivables that were sold within factoring agreements.
[ 21 ] Trade payables and other financial liabilities
2012
2011
Liabilities to employees
73,190
76,347
Tax liabilities
31,676
31,121
Liabilities connected with social security
13,937
15,069
Advance payments received
19,407
14,041
[ € ‘000 ]
Accruals
1,104
1,083
Other liabilities
4,810
5,238
144,124
142,899
[ 22 ] Other current liabilities
180
[ 23 ] Provisions
The changes in provisions are summarised as follows:
01/01/2012
Additions
due to
changes in
scope of
consolidation
Personnel-related
provisions
24,427
0
4,234
1,500
3,288
1,126
7
7
23,107
4,229
18,878
5,045
19,382
Provisions for
product warranties
21,858
38
5,595
5,473
6,480
10
(12)
25
17,281
17,281
0
21,858
0
Other provisions
for purchasing and
distribution
6,631
0
4,371
817
2,629
0
(31)
0
4,041
3,774
267
6,359
272
14,174
663
6,406
2,154
3,322
9
46
0
9,654
5,927
3,727
8,921
5,253
5,901
0
1,162
412
1,207
8
48
716
4,874
4,734
140
5,010
891
72,991
701
21,768
10,356
16,926
1,153
58
748
58,957
35,945
23,012
47,193
25,798
[ € ‘000 ]
Restructuring
provisions
Other provisions
Total
Usage Dissolution Allocation
Disposals
due to
changes in
nonscope of
current
current
Allocation Currency
consoliprovisions provisions
of interest differences
dation 31/12/2012
2012
2012
noncurrent
current
provisions provisions
2011
2011
The personnel-related provisions involved mainly long-term provision for partial retirement agreements in
Germany in the amount of € 7,634 k (previous year: € 8,751 k) and provision for anniversary bonuses in the
amount of € 9,067 k (previous year: € 8,005 k). The provision for anniversary bonuses is paid out according to
the age structure of the workforce upon the employees’ respective anniversaries of service. Based on the current workforce, payments will mostly become due in the next 21 years. The payments relating to provisions for
partial retirement will probably be spread over the next 6 years.
The product warranties were determined on the basis of past experience, with goodwill concessions also
taken into account. Provisions were added in the amount of € 6,480 k (previous year: € 11,189 k) for claims
under warranty and/or for compensation in fiscal 2012. These provisions for claims under warranty and/or for
compensation were offset by claims against the insurer in the amount of € 3,785 k (previous year: € 4,500 k).
There were also provisions for purchasing and distribution to cover onerous contracts.
The restructuring provisions in the amount of € 9,654 k (previous year: € 14,174 k) pertained to the Wire &
Cable Solutions Division in the amount of € 1,283 k (previous year: € 2,647 k) and to the Wiring Systems Division
in the amount of € 8,371 k (previous year: € 11,527 K). The non-current proportion of the restructuring provisions involved mostly severance costs in Italy in the Wiring Systems Division, payment of which stretches into
the year 2014. Use of restructuring provisions involved the amounts set aside in previous years for severance
costs pertaining to the Wiring Systems Division in Italy as well as to the Wire & Cable Solutions Division in
Germany. The additions in the amount of € 3,322 k involved severance costs pertaining almost exclusively to
Company information
181
the Wiring Systems Division.
[ 24 ] Pension provisions
A number of different pension plans exist in Germany. The former pension trust of Leonische Drahtwerke AG,
which covered all employees, was closed to people joining the Company after 31 December 1981. The benefits
of the pension trust were also divided. The pension trust is only used to pay current pension benefits to former
are based upon years of service and the salary of the last year of employment.
Pension obligations of acquired German companies are generally based on eligible compensation levels
and/or ranking within the Company hierarchy and years of service, or on a fixed amount per year of service. All
defined pension plans of acquired companies are closed.
In Germany, LEONI grants defined benefits to most employees for the deferral of compensation. Amounts
of deferred compensation earn interest at a rate of approx. 6 percent per year. These benefits are covered by
beneficiaries whereas future beneficiaries are subject to a defined benefit plan. The pension benefit payments
capital insurance. The reinsurance policies are qualifying insurance policies and are therefore recognised as
plan assets.
In the United Kingdom, there exists a funded defined benefit plan for all employees of the company. Pension benefit payments are based upon the salary of the last year of employment as well as years of service and
contributions of the employees to the plan.
In Switzerland there is a statutory obligation to provide employees with pension insurance, which, along
insured. This involves a defined benefit plan handled by the LEONI Switzerland pension trust. The retirement
benefit is determined upon retirement depending on credit balances in nominal savings accounts (old-age
credit).
In France there are defined benefit plans in accordance with the country’s legal requirements and other
agreements. The collective agreement of the French metal-working trade union determines the size of the
benefit. It is linked to monthly wages and salaries and depends on years of service.
At the Italian subsidiaries there are pension plans in accordance with the local legal requirements. These
must be qualified as defined benefit plans pursuant to IAS 19 and were presented accordingly.
Furthermore, there are at some foreign subsidiaries pension-like defined benefit schemes, above all for transition payments after entering retirement, which were presented as defined benefit plans pursuant to IAS 19
and which were of only minor significance to the Group.
with retirement benefit, covers the risks of death and invalidity for the employees of the Swiss company to be
182
The development of the pension obligations and related plan assets is summarised as follows:
Change in defined benefit obligations
[ € ‘000 ]
Defined benefit obligations at the beginning of the fiscal year
2012
2011
261,570
242,642
Current service cost
5,448
4,645
Interest cost
11,127
10,849
Contributions by plan participants
3,958
3,936
30,259
2,006
3,804
5,496
Business combinations
2,980
0
Disposal of subsidiaries
(4,043)
0
Actuarial (gains) / losses
Transfers under Swiss Law
Benefits paid
Defined benefit obligation at the end of the fiscal year
Change in plan assets
[ € ‘000 ]
Fair value of plan assets at the beginning of fiscal year
2,056
1,381
(15,711)
(9,385)
301,448
261,570
2012
2011
172,371
161,657
Expected return on plan assets
7,652
8,406
Actuarial gains / (losses)
4,938
(5,783)
2,822
4,049
Contributions by the employer
8,014
6,098
Contributions by plan participants
3,958
3,936
587
0
Disposal of subsidiaries
(3,480)
0
2,056
1,381
Benefits paid
(11,598)
(7,373)
Fair value of plan assets at the end of the fiscal year
187,320
172,371
Transfers under Swiss Law
The transfers under Swiss law concern transferred obligations and the related plan assets upon change of
employment and similar requirements under legislation specific to the country.
The actual return on plan assets amounted to € 12,590 k in the financial year (previous year: € 2,623 k).
The tables below show the funded status that is the difference between the defined benefit obligation and
the plan assets at the end of the year, and the recorded amounts in the balance sheet:
Funded status
[ € ‘000 ]
Funded status at the end of the fiscal year
Unrecognised actuarial (gains) / losses
Net amount recognised
Breakdown of the amount carried
in the statement of financial position
Prepaid benefit cost
[ € ‘000 ]
2012
2011
(114,128)
(89,199)
79,923
56,247
(34,205)
(32,952)
2012
2011
11,957
11,967
Pension provision
(46,162)
(44,919)
Net amount recognised
(34,205)
(32,952)
The prepaid benefit costs refer to the pension assets surplus to the obligations in the United Kingdom,
whereas the amount shown as pension provision refers almost entirely to obligations in Germany, France, Italy
and Switzerland.
Company information
183
The defined benefit obligation at the end of the financial year broke down into € 256,375 k (previous year:
€ 223,327 k) in funded obligations and € 45,073 k (previous year: € 38,243 k) in unfunded obligations.
The assumptions for interest rates, rates of compensation increase and the expected return on plan assets
on which the calculation for defined benefit obligations is based were established for each country as a function of their respective economic conditions. The discount rates applied were 3.60 percent (previous year:
5.10 percent) for Germany, 1.75 percent (previous year: 2.25 percent) for Switzerland and 4.50 percent (previous year: 4.90 percent) for the United Kingdom. The following weighted average rates were derived for the
Weighted average assumptions
2012
2011
Discount rate
3.58 %
4.24 %
Rate of wage and salary increase
2.39 %
2.43 %
Rate of compensation increase
1.89 %
1.89 %
Rate of employee turnover
3.26 %
3.29 %
assumptions made:
The (weighted average) assumptions made for calculating net periodic pension cost are shown in the table
below.
2013
2012
Discount rate
—
4.24 %
—
4.73 %
*
Interest rate on the net defined benefit liability/asset
3.68 %
Rate of wage and salary increase
2.39 %
—
2.43 %
Rate of compensation increase
1.89 %
1.89 %
Rate of employee turnover
3.26 %
3.29 %
* Calculation based on the weighted net defined benefit liability/asset
The assumptions relating to the expected return on plan assets for fiscal 2012 were based on detailed analyses
taking into account both the actual past returns on long-term investment and the projected long-term returns
on the target portfolio. The discount rate for the defined benefit obligations and for the expected return on
plan assets for the 2013 financial year was based on taking into account the amendments to IAS 19, which
must be applied from the beginning of the 2013 financial year. This requires the use of a uniform net interest component, i.e. the expected return on plan assets must be based on the same rate as that applied to
discounting the defined benefit obligations (cf. Note 3).
Weighted average assumptions
184
The assumed mortality is based on published statistics and historical data in the respective countries. The valuation of pension obligation in Germany was based on the “Heubeck-Richttafeln 2005 G” mortality tables.
The total expense for the defined benefit plans was as follows:
[ € ‘000 ]
2012
2011
Current service cost
5,448
4,645
Interest cost
11,127
10,849
(7,652)
(8,406)
Amortisation of actuarial (gains)/losses
Total expense from defined benefit obligations
2,654
2,255
11,577
9,343
The total expense is recognised in the income statement in the following items:
[ € ‘000 ]
2012
2011
Cost of sales
3,344
2,785
General administrative expenses
1,623
1,731
Selling expenses
1,297
1,008
Research and development costs
1,838
1,376
Finance costs
Total expense from defined benefit obligation
3,475
2,443
11,577
9,343
The interest costs relating to retirement benefit obligations as well as the expected return on plan assets were
presented under finance costs.
The plan assets comprised the assets of the defined contribution plan in England, of LEONI Switzerland pension trust and the qualifying insurance policies as well as the pension trust in Germany. The portfolio structure
for the measurement dates of the past two financial years and the target portfolio structure are summarised in
the following overview:
Target asset allocation
Portfolio structure, actual
2012
2011
Equity securities
30.1 %
30.8 %
31.5 %
Debt securities
30.6 %
28.1 %
35.6 %
Real estate
Other
9.3 %
11.2 %
6.1 %
30.0 %
29.9 %
26.8 %
100.0 %
100.0 %
100.0 %
The plan assets in the United Kingdom and Switzerland did not include any shares or debt securities of LEONI
Group companies or parties related to them.
The plan assets in Germany included an amount of € 675 k (previous year: € 770 k) that the pension trust
Company information
185
provided LEONI AG as a loan, as well as qualifying insurance policies in the amount of € 25,884 k (previous year:
€ 22,179 k).
The contribution estimated for the next financial year is € 4,539 k.
The following overview contains the defined benefit obligation and the plan assets as well as the respective
[ € ‘000 ]
Defined benefit obligations at the end of the fiscal year
Fair value of plan assets at the end of fiscal year
2012
2011
2010
2009
2008
(301,448)
(261,570)
(242,642)
(213,048)
(174,122)
187,320
172,371
161,657
128,924
109,684
(114,128)
(89,199)
(80,985)
(84,124)
(64,438)
Experience adjustments defined benefit obligation
(118)
(1,084)
(3,724)
(415)
(1,421)
Experience adjustments plan assets
2,969
(5,783)
(244)
7,852
(28,929)
Funded status at the end of the fiscal year
Some non-German companies provide defined contribution plans. In Germany and other countries state plans
experience adjustments:
were also recognised under defined contribution plans. The total cost of such contributions amounted to
€ 54,496 k in the financial year (previous year: € 48,476 k).
[ 25 ] Equity
The share capital in the amount of € 32,669 k (previous year: € 32,669 k), which corresponds to the share capital
of LEONI AG, is divided into 32,669,000 (previous year: 32,669,000) no-par-value shares.
In the previous year, LEONI AG placed 2,969,000 new, registered no-par-value shares from the increase in
capital for cash from authorised capital agreed by the Management Board with the Supervisory Board’s approval on 30 June 2011 at a price of € 38.00 per share. Shareholders’ right to subscribe was excluded. The gross
proceeds were € 112,822 k. Less the costs of € 1,304 k incurred in connection with the capital increase and
taking the associated income tax effect into account, € 111,895 k was recognised as additional equity, of which
€ 2,969 k in share capital and the remainder in additional paid-in capital.
The reconciliation below shows the change in the number of shares outstanding in the previous fiscal year
2011:
Number of shares outstanding on 31/12/2010
Shares issued as part of the capital increase in fiscal 2011
No. of shares outstanding on 31/12/2011
29,700,000
2,969,000
32,669,000
Share capital
186
Additional paid-in capital
As in the previous year, the additional paid-in capital amounted to € 290,887 k.
Statutory reserve
As in the previous year, the retained earnings included the statutory reserve of LEONI AG in the amount of
€ 1,092 k, which is not available for distribution.
Authorised capital
The Management Board is authorised, pursuant to the Articles of Association following the Annual General
Meeting’s resolution of 16 May 2012, to increase the share capital in the period up to 15 May 2017 and with
the approval of the Supervisory Board once or in partial amounts by up to € 16,334.5 k by issuing new shares
on a cash or non-cash basis. Shareholders must be granted a right to subscribe. However, the Annual General
Meeting entitled the Management Board, with the approval of the Supervisory Board, to rule out shareholders’ subscription rights in cases specified in the Articles of Association.
Contingent capital
Shareholders at the Annual General Meeting on 6 May 2010 authorised the Management Board to issue
convertible bonds and/or warrant-linked bonds until 5 May 2015. This involved a contingent increase in share
capital by up to € 14,850 k. The contingent capital increase is only to be performed to the extent that conversion and/or option rights have been utilised or that the holders and/or creditors obliged to convert have met
their conversion obligation and provided that no cash settlement has been granted or Company shares or new
shares from the utilisation of approved capital are utilised for the exercise of rights.
Dividend payment
A dividend for the 2011 financial year of € 49,004 k was paid out in fiscal 2012. This corresponded to a dividend
of € 1.50 per share entitled to dividend.
Dividend proposal
The Management Board will propose to shareholders at the Annual General Meeting to pay out from the fiscal
2012 distributable profit of LEONI AG, amounting to € 50,055 k as determined under the German Commercial
Code and the German Public Companies Act, a dividend of € 49,004 k and to carry the remainder of € 1,051 k
forward. This corresponds to a dividend of € 1.50 per share entitled to dividend.
[ 26 ] Contingencies and other obligations
Lease obligations
Company information
187
The Group leases property, plant and equipment that does not qualify as finance leases under IFRS, and are
therefore classified as operating leases. Leasing expenses amounted to € 24,438 k in the financial year (previous year: € 23,305 k). The future (undiscounted) minimum rental payments on non-cancellable operating
Fiscal years
[ € ‘000 ]
2013
19,999
2014
14,506
2015
10,972
2016
8,827
2017
7,772
as of 2018
5,930
Total
68,006
leases are:
Purchase order commitments
Purchase order commitments for property, plant and equipment as well as intangible assets amounted
€ 3,950 k on the balance sheet date (previous year: € 2,237 k).
Litigation and claims
There are pending claims for damages under warranty and/or for compensation in amounts normal for the
amounts with respect to claims for damages and, where applicable, claims against the insurers have been recognised. Possible future liability for damages under warranty and/or for compensation may arise in an amount
usual for the field of business the Company is dealing in.
In October 2011, consumers (car buyers) and car dealers in the United States initiated several civil proceedings in the form of class action lawsuits against the major wiring systems manufacturers that operate
internationally. The claimants allege that they paid excessively for their vehicles because of alleged breaches of
US antitrust law. The lawsuits were pooled in several class actions comprising various classes of claimants. One
of these proceedings was conjointly resolved during the year under report without any payment obligation on
LEONI. In the other proceedings the legal decision as to whether LEONI will continue to be involved is pending.
LEONI expects a favourable decision on this soon.
As reported, LEONI has been affected since the end of February 2010 by international investigations under
competition law in the automotive supply sector. The European Commission commenced proceedings in this
regard on 3 August 2012, against LEONI AG among others. As part of these proceedings, the Commission is
investigating whether competitors breached competition law in the sale of cable harnesses in Europe. LEONI is
cooperating with the authority.
Other than the above, there have not been any and there are currently no pending lawsuits or court proceedings that might have a major impact on LEONI’s business.
sector, some of which are covered by insurance. The insurers are currently examining the cases. Appropriate
188
[ 27 ] Risk management and financial derivatives
Credit risk
All customers with whom the Group intends to conclude business on a credit basis are subject to credit screening. Regular analysis of receivables and the structure of the receivables facilitates ongoing monitoring of the
risk. Accounts receivable management is organised in a decentralised way but is controlled by the head office,
which sets conditions by means of the existing guideline for Group-wide accounts receivable management.
There were no indications on the reporting date that trade receivables, which are neither impaired nor
overdue, would not be settled.
The table below shows the breakdown by region of receivables from customers.
2012
2011
51
59
thereof Germany
11
16
Hungary
6
8
France
6
5
Great Britain
5
7
Italy
4
5
[ in percentage points ]
Europe
Others
Asia
thereof China
South Korea
Others
North America
Others
19
18
29
22
20
17
5
1
4
4
14
14
6
5
The following table shows the size categories of receivables from customers on the balance sheet date.
2012
2012
2011
2011
[%]
[ total share in % ]
[%]
[ total share in % ]
Largest customer
11
11
11
11
Second largest customer
10
10
9
9
4–6
15
3–4
11
<4
64
<3
69
Third to fifth largest customer
Other customers
Information on the due dates of trade receivables is presented in Note 11.
26 percent (previous year: 31 percent) of all receivables were covered, with insurance limits, by a Group
master policy with a credit insurer or other local credit insurers. Insurance excess amounts were disregarded
in determining the total amount insured. The amount actually insured was consequently slightly below this
Company information
189
percentage. 51 percent (previous year: approx. 43 percent) of the non-insured receivables involved customers
that are exempt from contractually compulsory cover. The customers exempt from contractually compulsory
cover were mainly major companies in the automotive as well as electronic/electrical engineering sectors. For
23 percent (previous year: 26 percent) of total receivables there was no cover from a credit insurer. The table
below shows the breakdown of insured and non-insured receivables from customers:
[%]
Receivables
2012
2011
26
31
exempt from compulsory cover
51
43
no covers
23
26
The insured subsidiaries must apply for credit insurance limits to the credit insurer for all receivables from
customers that are not exempt from compulsory cover and that exceed the limits specified on the existing
guideline. The following specific conditions apply: LEONI has an obligation to declare exposure to the credit
Receivables not covered by insurance
insurers for all receivables from customers greater than € 50 k. A cover limit can also be obtained for smaller receivables. Consignment stores and manufacturing risks are covered by blanket insurance. The credit insurance
policy reimburses 90 percent of the insured amount. Measurement and monitoring with respect to impairment of the non-insured receivables is supported among other things by the credit screening carried out by
the credit insurer and other service providers.
Subsidiaries will be integrated in the master policy so far as this makes sense from the aspect of the principal
inclusion. The subsidiaries that cannot be integrated are to be covered via local credit insurers. Internal credit
limits are set for major customers that are exempt from mandatory cover and other non-insured customers.
Limits are applied for without delay, on a decentralised basis and are monitored by the head office accounts
receivable management.
Factoring, or true sale factoring for selected customers, serves as a further tool to reduce the risk of default.
Customers with good credit ratings are also included.
customer base and provided there are no regional or political reasons on the part of the credit insurer against
190
Liquidity risk
The Group monitors its current liquidity situation on a daily basis. Monthly, currency-specific, rolling liquidity planning for respective periods of at least twelve months is used to control future liquidity requirement.
The planning takes into consideration the terms of investments and financial assets (e.g. receivables, other
financial assets) as well as the expected cash flows from business activity. In addition, we analyse our existing
finance based on our medium-term planning, which we revise annually. We initiate suitable measures in good
time so far as there is any change in borrowing requirement.
The Group’s objective is to ensure funding in the respectively required currency. Flexibility is maintained by
using overdrafts, loans, leases, factoring and capital market instruments. A wide variety of financial instruments is available to LEONI on the capital market, from banks and among suppliers without the need for an
external rating, financial covenants or other collateralisation.
To ensure liquidity and to cover required guarantees, there were on the balance sheet date credit lines from
first-rate banks amounting to € 485,975 k (previous: € 330,767 k) with terms up to 36 months. These credit lines
were drawn via current accounts and fixed deposits in the amount of € 23,865 k (previous year: € 36,094 k).
Together with the short-term proportion of long-term loans, current liabilities to banks amounted to
€ 37,968 k (previous year: € 94,028 k). In addition there was a long-term loan commitment in the amount of
€ 100,000 k, on which the Company can draw in fiscal 2013.
The table below shows the contractually agreed (undiscounted) interest and principal payments pertaining
to the primary financial liabilities as well as the derivative financial instruments with negative fair values:
Carrying
amount
31/12/2012
Cash flow
2013
Trade payables
(594,680)
(594,680)
Bond
(204,449)
(210,000)
(39,271)
(38,394)
2012
[ € ‘000 ]
Cash flow
2014
Cash flow
2015 – 2017
Cash flow
starting
2018
(232)
(473)
(570)
(8,318)
(184,774)
(121,328)
(2,441)
(602)
Non-derivative financial liabilities
Liabilities to banks
Liabilities on bills of exchange and other financial debts
Borrower’s note loans
Other financial liabilities
(441)
(441)
(303,332)
(33,480)
(41,608)
(41,608)
Derivative financial liabilities
Currency derivatives without a hedging relationship
(1,868)
159,702
(161,733)
Currency derivatives in connection with cash flow hedges
(1,584)
78,577
(79,394)
Interest rate derivatives in connection without a hedging
relationship
(6,298)
(3,624)
2011
[ € ‘000 ]
Carrying
amount
31/12/2011
Cash flow
2012
Cash flow
2013
Cash flow
2014 – 2016
Cash flow
starting
2017
(532)
(737)
Company information
191
Non-derivative financial liabilities
Trade payables
(562,703)
(562,703)
Bond
(204,226)
(10,000)
(210,000)
(108,230)
(96,492)
(12,944)
(800)
(533)
(267)
(286,661)
(14,098)
(176,271)
(31,561)
(31,561)
Liabilities on bills of exchange and other financial debts
(115,414)
Currency derivatives without a hedging relationship
Currency derivatives in connection with cash flow hedges
(8,360)
(5,517)
147,401
4,454
(155,645)
(4,877)
103,338
(107,246)
Interest rate derivatives in connection with cash flow hedges
(11,203)
(6,488)
Commodity future transactions
(329)
(329)
(673)
(25,660)
(2,469)
(2,052)
The cash flow presented in the previous year for 2012 for the derivative from business combinations constituted the consideration to be paid in the future for acquisition of the outstanding shares in the Korean joint
venture Daekyeung T&G Co. Ltd.
All instruments held on the respective balance sheet date and for which payments were already contractureporting date. The variable interest payments pertaining to the financial instruments were determined on
the basis of the interest rates fixed most recently prior to the respective balance sheet date. Financial liabilities
repayable at any time are always allocated to the earliest time period. In the case of the currency derivates,
both the cash outflow and the cash inflow are presented in the table above for the purpose of transparency.
Non-Deliverable Forwards (NDFs) were signed to hedge amounts in currencies that are not freely convertible. This form of foreign currency transaction involves fulfilment upon maturity being based not on handling
the cash flows in the corresponding currencies, but in the form of a settlement payment.
Interest rate risks
We use interest rate derivatives, among other means, to avoid the risk of changes in interest rates. Such
contracts are signed exclusively by LEONI AG. The agreed reference interest rate was the EURIBOR for three
months. These derivative contracts (interest rate) have maturities of up to two years and three months. The
market value as at 31 December 2012 of the interest rate derivates therefore totalled negative € 6,298 k (previous year: negative € 11,203 k).
ally agreed were also included. Foreign currency amounts were in each case translated at the spot rate on the
192
Due to the early refinancing measures, the existing interest rate derivates no longer fulfilled the conditions for
hedge accounting.
The changes in market value that occurred up to the date on which the hedge relationship was ended were
recognised within accumulated other comprehensive income. They remain in other comprehensive income
and will be reclassified pro-rata over the remaining term of the respective derivative to finance costs in the
income statement. The residual value recognised in other comprehensive income as at 31 December 2012
amounted to negative € 5,997 k. The reclassification to finance costs amounted to € 2,067 k.
Changes in market value occurring after the hedge relationship has ended are recorded in the income statement.
The changes in market value of the interest rate derivatives totalled € 4,905 k in the financial year (previous
year: € 3,193 k), of which € 3,138 k (previous year: € 3,166 k) was recognised in other comprehensive income and
€ 1,767 k (previous year: € 0 k) was recognised in the income statement.
We regard the counterparty risk as being very small because all derivative contracts were signed with
national and international commercial banks that have first-class ratings. Counterparty risk is subject to regular
monitoring.
Interest rate sensitivity
Consolidated earnings depend on the level of market interest rates. Any change in this level would impact on
the Group’s earnings and equity. The analysis we carry out covers all interest-bearing financial instruments that
are subject to the risk of changes in interest rates. To the end of the 2012 financial year the interest rate derivatives no longer met the conditions for hedge accounting, meaning that the risk of changes in interest rates did
not affect other comprehensive income in equity.
When calculating the sensitivity of the interest rates we assume a parallel shift in the yield curve. The upward shift comes to 50 basis points; the downward shift comes to just 25 basis points because of the currently
low level of interest rates. With respect to the currencies that are key to us in this respect, the impact of the
shift is as follows:
2012
[ € ‘000 ]
Changes in interest, earnings
+ 0.50 %
(0.25) %
CNY
185
(93)
EUR
916
(252)
2011
[ € ‘000 ]
Changes in interest, equity
+ 0.50 %
(0.25) %
EUR
1,849
(886)
USD
39
(20)
Changes in interest, earnings
+ 0.50 %
(0.25) %
CNY
21
(11)
EUR
1,068
(494)
As at 31 December 2012, there were no primary financial assets held in the category at fair value through profit
or loss that would have to be included in the presentation. The primary financial assets in the available-forsale category as at 31 December 2012 comprise exclusively non-interest-bearing equity instruments. They are
Company information
193
consequently not at risk of changes in interest rates and are not included in the assessment. Nor are fixed-interest financial instruments at risk of changes in interest rates and are thus disregarded in our assessment. The
impact of financial instruments designated in the context of cash flow hedge accounting is reflected in equity.
Currency risks
Although we conduct business mainly in euros or in the local currency of the respective country, we are
increasingly faced with currency risks due to the globalisation of the markets.
In the Group’s holding company, LEONI AG, the Corporate Finance department deals with the resulting curlimits and terms. Hedging transactions are executed in line with the existing underlying transactions as well as
the planned transactions.
Selection of the hedging instrument to be used is based on regular, in-depth analysis of the underlying
transaction to be hedged. Most of the hedging transactions are in pounds sterling, Mexican pesos, Polish zloty,
Romanian lei, Swiss francs and US dollars. The objective is to limit the impact of exchange rate variation on net
income. Apart from the actual hedging transactions, we primarily take advantage of the option of netting for-
rency risks in collaboration with and based on the conditions set by the currency committee with respect to
eign currency items within the Group to hedge our operating business activity. As a further currency-hedging
measure, we in principle finance our foreign subsidiaries in their respective functional currencies by way of
refinancing in the corresponding currency.
On the balance sheet date, there were currency-hedging transactions amounting to € 484,353 k (previous
year: € 454,814 k), maturing within 12 months. The total market value of the foreign exchange transactions
as of the balance sheet date was nil, meaning there was no effect on the income statement (previous year:
the conditions for hedge accounting (cash flow hedge). They were completed in the 2011 and 2012 financial
years. Their total fair value of € 105 k (previous year: negative € 3,835 k) was recognised in other comprehensive income. The cash flows from the underlying transactions are expected during the 2013 financial year. The
changes in fair value recognised in other comprehensive income are derecognised via the income statement at
the time the underlying transaction takes effect.
The amounts recognised in other comprehensive income in the context of hedge accounting came to
€ 4,734 k in the financial year (previous year: negative € 2,869 k). An amount of € 687 k (previous year:
€ 2,540 k) was derecognised via the income statement as shown in the table below. In acquisition costs € 0 k
(previous year: € 48 k) was recognised with a minimising effect because the underlying transaction involved an
investment in property, plant or equipment.
[ € ‘000 ]
Sales
2012
2011
(7)
418
Cost of sales
435
2,118
Financial result (Inefficiency)
259
4
Total
687
2,540
negative € 5,415 k). Foreign exchange transactions amounting to € 188,108 k (previous year: € 136,394 k) met
194
In addition to this amount of € 687 k (previous year: € 2,540 k) recognised in the income statement, losses of
€ 7,636 k (previous year: income of € 5,979 k) from currency hedging transactions were expensed in the financial year, offset by the corresponding effect on earnings from underlying transactions.
The currency hedging transactions, as well as our interest rate hedging transactions, were signed with first
rate commercial banks, meaning that there was no significant counterparty risk either. This area is also subject
to regular monitoring.
There were no risks related to financial instruments on the balance sheet date that resulted in any noteworthy risk concentration.
Exchange rate sensitivity
Changes in exchange rates that are by prudent judgement essentially possible would affect consolidated
earnings due to the fair values of the monetary assets and liabilities. Additional factors would arise that would
affect equity due to change in fair value in the context of cash flow hedge accounting. We consider the risk of
changes in interest rates arising from the currency derivatives to be immaterial, which is why it is not included
in the assessment.
The table below is based on the exchange rates as at the balance sheet date. It illustrates the impact arising,
from the perspective of the Group companies concerned, from appreciation or devaluation of the foreign currencies to be taken into account by 10 percent either way versus the respective functional currency. Comprehensive income per currency therefore also includes the impact arising from appreciation or devaluation of
the euro for those Group companies where the functional currency is one of those stated in the table.
2012
[ € ‘000 ]
Changes in exchange rates, equity
EGP
2011
[ € ‘000 ]
+ 10 %
(10) %
+ 10 %
(10) %
1,302
(1,065)
Changes in exchange rates, equity
GBP
1,243
(1,017)
GBP
2,169
(1,775)
MXN
3,664
(2,998)
MXN
4,001
(3,273)
PLN
1,762
(1,441)
PLN
1,595
(1,305)
RON
4,721
(3,862)
RON
5,946
(4,865)
USD
1,074
(638)
+ 10 %
(10) %
+ 10 %
(10) %
Changes in exchange rates, earnings
Changes in exchange rates, earnings
EGP
(62)
51
GBP
349
(285)
GBP
(112)
92
MXN
(423)
346
MXN
(439)
359
PLN
128
(105)
PLN
(483)
396
RON
(363)
297
RON
(721)
589
USD
737
(448)
Risks related to raw material prices
Business within the Wire & Cable Solutions division is sensitive to changes in raw materials prices, especially
of copper, but also gold and silver. For this reason, purchase prices for gold, silver and especially copper are
Company information
195
hedged by way of future transactions to cover the usual future procurement volume. Such commodity future
transactions are signed within ordinary business activity and as part of purchasing activity for required raw
materials and therefore need not, in line with IAS 39, be accounted for as financial derivatives. Commodity
future transactions that are settled in cash are recognised as derivatives, changes in the fair value of which are
recognised in the cost of sales.
The risks arising from these derivatives are of minor significance to the Group.
Capital management
good equity ratio and appropriate gearing to support its business and increase shareholder value.
The Group manages its capital structure and makes adjustments based on the change in underlying economic conditions. To maintain and adjust its capital structure, the Group can make adjustments to dividend
payouts to shareholders, repay capital to shareholders or issue new shares. In order to have as broad a range of
funding options as possible, LEONI aims to seek approval during its Annual General Meeting for all anticipatory resolutions. No changes to the fundamental guidelines or processes were made in either the 2012 or 2011
The primary objective of LEONI’s capital management is to ensure that it maintains a strong credit rating, a
financial years. LEONI controls its capital with gearing. Gearing is defined as the ratio of net financial debts to
equity.
LEONI expects a sustained equity ratio of 35 percent. Due to fluctuation in elements of other comprehensive
income that cannot be influenced, and which will become even stronger because of the changed requirements under IAS 19 to retirement benefit obligations effective from 2013 (cf. Note 3), the equity ratio could
temporarily also drop below this figure. With respect to gearing, the general target is a figure below 50 perspending on organic growth that exceeds the market average can be generated from operating cash flow and
that reducing financial liabilities is possible.
2012
2011
547,493
599,917
(298,324)
(365,995)
Net financial debts
249,169
233,922
Equity
845,128
737,481
29 %
32 %
[ € ‘000 ]
Debt
less cash and cash equivalents
Gearing
At the end of fiscal 2012 gearing stood at 29 percent (previous year: 32 percent), which is attributable primarily to the increase in equity due to 14.6 percent earnings growth accompanied by an only slight, 6.5 percent
increase in net financial liabilities.
cent. During periods of acquisition this ratio may be temporarily exceeded. In principle, the aim is that capital
196
Additional disclosure on financial instruments
Amounts recognised in balance sheet according to IAS 39
[ € ‘000 ]
Category in
accordance
with IAS 39
Carrying
amount
31/12/2012
Amortised
cost
Cost
Fair Value
recognised
in equity
Fair Value
recognised in
profit or loss
Fair Value
31/12/2012
Assets
LaR
298,324
298,324
298,324
Trade receivables
LaR
460,422
460,422
460,422
Long-term trade receivables from development contracts
LaR
41,826
41,826
41,826
LaR
19,277
19,277
19,277
AfS
1,313
Other non-derivative financial assets
Available-for-Sale financial assets
1,066
1,313
247
Derivative financial assets
Derivatives without a hedging relationship
Derivatives with a hedging relationship
FAHfT
1,938
n/a
1,689
1,938
1,938
1,689
1,689
Trade payables
FLAC
594,680
594,680
594,680
Bonds and other securitised liabilities
FLAC
204,449
204,449
207,175
FLAC
39,271
39,271
39,065
Liabilities on bills of exchange
and other financial liabilities
FLAC
441
441
441
FLAC
303,332
303,332
312,696
FLAC
41,608
41,608
41,608
FLHfT
8,166
n/a
1,584
Loans and Receivables (LaR)
LaR
819,849
819,849
0
0
0
Available-for-Sale financial assets (AfS)
AfS
1,313
0
1,066
247
0
1,313
FAHfT
1,938
0
0
0
1,938
1,938
FLAC
1,183,781
1,183,781
0
0
0
1,195,665
FLHfT
8,166
0
0
0
8,166
8,166
8,166
8,166
1,584
1,584
Of which aggregated by categories in accordance with IAS 39:
Financial Assets Held for Trading (FAHfT)
Financial Liabilities measured at Amortised Cost (FLAC)
Financial Liabilities Held for Trading (FLHfT)
819,849
Amounts recognised in balance sheet according to IAS 39
Category in
accordance
with IAS 39
Carrying
amount
31/12/2011
Amortised
cost
LaR
365,995
365,995
365,995
Trade receivables
LaR
433,695
433,695
433,695
Long-term trade receivables from development contracts
LaR
39,492
39,492
39,492
LaR
21,985
21,985
21,985
AfS
1,104
FAHfT
2,945
n/a
1,682
[ € ‘000 ]
Cost
Fair Value
recognised
in equity
Fair Value
recognised in
profit or loss
Fair Value
31/12/2011
Company information
197
Assets
Other non-derivative financial assets
1,104
1,104
2,945
2,945
1,682
1,682
Trade payables
FLAC
562,703
562,703
562,703
Bonds and other securitised liabilities
FLAC
204,226
204,226
209,575
FLAC
108,230
108,230
108,290
Liabilities on bills of exchange
and other financial liabilities
FLAC
800
800
800
FLAC
286,661
286,661
288,760
FLAC
31,561
31,561
31,561
FLHfT
9,362
n/a
16,720
Loans and Receivables (LaR)
LaR
861,167
861,167
0
0
0
Available-for-Sale financial Assets (AfS)
AfS
1,104
0
1,104
0
0
1,104
FAHfT
2,945
0
0
0
2,945
2,945
FLAC
1,194,181
1,194,181
0
0
0
1,201,689
FLHfT
9,362
0
0
0
9,362
9,362
9,362
9,362
16,720
16,720
Financial Assets Held for Trading (FAHfT)
Financial Liabilities Measured at Amortised Cost (FLAC)
Financial Liabilities Held for Trading (FLHfT)
Due to the short terms of the cash and cash equivalents, trade receivables and other current receivables, the
fair values largely correspond to the carrying amounts.
The fair values of other non-current receivables maturing after more than one year correspond to the present values of payments relating to the assets, in each case taking into account the current interest parameters
that reflect market and partner-related changes in terms.
Trade liabilities and other liabilities usually mature in the short term; the amounts on the balance sheet
represent approximations of fair value.
The fair value of the bond corresponds to its market value.
The fair values of liabilities to banks, the borrower’s note loans and the other non-current financial liabilities
are determined at the present values of the payments relating to the liabilities based on the respectively applicable yield curves.
861,167
Of which aggregated by categories in accordance with IAS 39:
198
The detailed breakdown of the fair values of the derivative financial instruments and their nominal values was
as follows on the balance sheet date:
Derivative financial instruments
[ € ‘000 ]
31/12/2012
Nominal value
31/12/2012
Fair value
31/12/2011
Nominal value
31/12/2011
Fair value
233,571
3,557
191,687
4,627
37,591
53
44,935
471
Assets
Currency contracts
Forward exchange transactions
CHF
GBP
5,825
2
45,999
1,443
MXN
35,084
415
349
1
PLN
26,446
409
13,018
142
RON
29,780
562
15,333
79
USD
72,907
1,794
35,465
1,403
Others
25,938
322
36,588
1,088
(thereof hedge accounting)
98,158
1,689
32,682
1,682
12,532
70
0
0
250,782
3,452
263,127
13,877
Currency contracts
Forward exchange transactions
CHF
48,294
136
30,143
1,004
GBP
69,739
977
0
0
MXN
6,878
158
37,534
3,101
PLN
14,073
46
31,895
1,093
RON
42,181
453
44,038
669
USD
27,829
799
91,601
7,130
Others
41,788
883
27,916
880
89,950
1,584
103,712
5,517
199,500
6,298
262,229
11,203
136,000
1,012
136,000
3,636
63,500
5,286
126,229
7,567
Derivative interest rate contracts
Interest rate collars
Interest swaps
0
0
262,229
11,203
0
0
10,227
329
—
0
—
673
Company information
199
The fair values of the foreign exchange transactions were based on current reference rates observable on
the market and taking into consideration forward premiums or discounts. The fair values of the interest rate
hedging instruments (interest swaps and interest collars) were based on discounted future cash flows. The applicable market interest rates and volatilities were used for the maturities of the financial instruments.
The table below contains an overview of the valuation methods used for measuring the fair value of the
financial instruments concerned.
31/12/2012
[ € ‘000 ]
Prices quoted
on active markets
(step 1)
Valuation methods where
all principal parameters
are based on observable
market data
(step 2)
all principal parameters are
not based on observable
market data
(step 3)
Total
Primary financial assets
247
0
0
247
0
1,938
0
1,938
0
1,689
0
1,689
0
8,166
0
8,166
0
1,584
0
1,584
Financial liabilities measured at fair value
Financial assets measured at fair value
31/12/2011
[ € ‘000 ]
Prices quoted
on active markets
(step 1)
all principal parameters
are based on observable
market data
(step 2)
all principal parameters are
not based on observable
market data
(step 3)
Total
Financial assets measured at fair value
Derivatives not involving hedging
0
2,945
0
2,945
Derivatives involving hedging
0
1,682
0
1,682
329
8,360
673
9,362
0
16,720
0
16,720
Financial liabilities measured at fair value
200
Neither in the fiscal year under report nor in the previous one was there any movement between the individual levels. In the previous year there was just one derivative in fair-value hierarchy level three, which was
recognised as a financial liability and performed as follows in the 2012 financial year.
[ € ‘000 ]
2012
2011
Status of Stage 3 on 1 January
(673)
720
Measurement changes recognised in the income statement
(205)
(1,393)
878
0
0
(673)
Other changes
Status of Stage 3 on 31 December
The derivative and financial liability was recognised in fiscal 2012 in the context of consolidating Daekyeung
for the first time as part of the consideration for the shares.
The net results of the financial instruments by measurement category were as follows:
Net result
[ € ‘000 ]
Loans and receivables (LaR)
Available-for-Sale financial assets (AfS)
Derivatives (HfT)
thereof impairment losses
2012
2011
2012
2011
(3,199)
2,178
(2,588)
(3,884)
137
0
0
0
1,951
(2,451)
0
0
Financial Liabilities measured at Amortised Cost (FLAC)
(3,793)
(6,928)
0
0
Total
(4,904)
(7,201)
(2,588)
(3,884)
[ 28 ] Segment reporting
The Group is organised into business units by products and services for the purpose of corporate governance.
Company information
201
The segment reporting follows the internal organisational and reporting structure of the Group. The Group has
two segments subject to reporting:
The Wire & Cable Solutions division covers development, manufacture and sale of wires, strands and tapes as
well as optical fibers for cable production and electrical as well as electromechanical components, of Lyonese
wares for textiles as well as cables, conductors and cable systems for the automotive and electrical appliance
industries, data and communications technology, the professional multimedia segment, the healthcare sector,
dustry, infrastructure projects as well as services in the field of irradiation crosslinking. The products meet both
German and international standards as well as customer specifications. The conductive material most commonly used is copper, but the division also produces fiber optic cables based on both glass and polymer fiber.
Wiring Systems
The activity of the Wiring Systems Division is focused on the development, production and sale of complete
automation and process technology, machinery and plant engineering, major industrial plants, the solar in-
wiring systems and ready-to-install cable harnesses for passenger cars and commercial vehicles. In addition
to conventional cable harnesses, the division also manufactures preformed cable harnesses, plastic moulded
components, electronic wiring system components as well as ready-to-connect single cables with matching
connectors and fixings.
Management monitors the earnings before interest and taxes (EBIT) separately to take decisions on allocation
and valuation principles of the consolidated financial statements. It also contains the earnings from measurement under the equity method of joint ventures and associated companies.
The ROCE (Return on Capital Employed) is a key return figure on the basis of which management monitors
the profitability of the segments. It is derived from the ratio of EBIT to average Capital Employed (CE), which
comprises the non-interest-bearing assets less non-interest-bearing liabilities. The calculation uses the amount
of capital employed at its average quarterly levels. The quarterly returns add up to the ROCE on an annual
basis.
Intersegment sales and revenues are generally recorded at values that approximate sales to third parties.
of resources and to determine the profitability of the units. The EBIT is ascertained in line with the accounting
202
The details by segment for the 2012 and 2011 financial years are as follows:
[ € ‘000 ]
Reconciliation
LEONI Group
2012
2012
2012
2012
2011
2011
2011
2011
Sales
1,769,121
1,869,987
2,206,553
2,024,036
(166,667)
(192,536)
3,809,007
3,701,487
Less intersegment sales
166,514
192,337
153
199
(166,667)
(192,536)
—
—
External sales
1,602,607
1,677,650
2,206,400
2,023,837
—
—
3,809,007
3,701,487
domestic
440,940
529,780
587,869
537,359
0
0
1,028,809
1,067,139
abroad
1,161,667
1,147,870
1,618,531
1,486,478
0
0
2,780,198
2,634,348
73.0
71.2
24
9
235,811
237,141
abroad in %
EBIT
as a percentage of external sales
72.5
68.4
73.4
73.4
101,273
90,905
134,514
146,227
6.3
5.4
6.1
7.2
6.2
6.4
Financial result and other investment income
(37,923)
(40,891)
Income before tax
197,888
196,250
Income taxes
(41,867)
(40,291)
Consolidated net loss / income
156,021
155,959
Earnings from measurement
under the equity method
0
0
(121)
(7,071)
0
0
(121)
(7,071)
Depreciation and amortisation
40,062
40,306
71,280
62,275
4,860
4,464
116,202
107,045
4,884
4,473
EBITDA
as a percentage of external sales
141,335
131,211
205,794
208,502
8.8
7.8
9.3
10.3
352,013
344,186
9.2
9.3
Impairment of non-current assets
0
1,508
0
6,600
0
0
0
8,108
Restructuring expenses
907
1,202
8,636
1,207
0
0
9,543
2,409
Total assets
991,143
985,363
1,242,213
1,055,368
150,718
279,849
2,384,074
2,320,580
Average capital employed
538,686
531,608
611,427
509,502
(16,406)
(5,560)
1,133,707
1,035,550
ROCE
18.8 %
17.1 %
22.0 %
28.7 %
20.8 %
22.9 %
Investment in property, plant and equipment
as well as intangible assets
49,512
53,721
98,732
76,289
5,973
7,428
154,217
137,438
Average number of employees
8,060
8,142
53,203
50,032
198
172
61,461
58,346
Company information
203
Segment information by geographical regions:
Federal Republic
of Germany
2012
2011
440,940
529,780
29,172
587,869
537,359
328,138
1,028,809
1,067,139
357,310
137,106
158,168
23,336
[ € ‘000 ]
EU excl. Germany
and France
France
2012
2011
Outside EU
2012
2011
34,679
351,592
357,582
645,391
392,261
27,388
LEONI Group
2012
2011
2012
2011
373,503
780,903
739,688
1,602,607
1,677,650
691,510
645,002
437,386
2,206,400
2,023,837
996,983
1,065,013
1,425,905
1,177,074
3,809,007
3,701,487
150,539
139,704
458,072
382,188
769,053
707,448
External sales
Non-current assets
The non-current assets segmented by region include the intangible assets and the property, plant and equipGroup Management report
ment as well as investments in associated companies and joint ventures.
As in the previous year, there were no sales in the 2012 financial year to any one customer accounting for
10 percent or more of consolidated sales.
[ 29 ] Earnings per Share
Basic earnings per share are calculated as follows:
Numerator:
2011
Total amount
Earnings
per share
Group interests
Total amount
Earnings
per share
Group interests
[ € ‘000 ]
[€]
[ € ‘000 ]
[€]
Income before taxes
Attributable to equity holders of the parent
197,453
6.04
196,005
6.29
Consolidated net income
Attributable to equity holders of the parent
155,661
4.76
155,734
4.99
Denominator: Weighted average
number of shares outstanding
32,669,000
31,184,500
The number of shares outstanding on 31 December 2012, of 32,669,000 (previous year: 32,669,000), corresponds to the number of shares issued. As in the previous year, there was no dilution effect in the financial year
under report.
2012
204
[ 30 ] Auditor’s professional fees
The following expenses were recognised in the financial year for work performed by the auditors appointed to
audit the financial statements and consolidated financial statements as at 31 December 2012: € 742 k (previous
year: € 786 k) for the audit, € 200 k (previous year: € 198 k) for the auditor’s review of the six-month financial
statements and € 80 k (previous year: € 5 k) for other assurance services, € 299 (previous year: € 420 k) for tax
consulting services and € 46 k (previous year: € 69 k) for other services.
[ 31 ] Personnel expenses and employees
[ € ‘000 ]
Wages and salaries
Social-security contributions, expenses for pensions
and retirement and fringe benefits
2012
2011
597,582
552,994
134,725
116,125
732,307
669,119
The latter item includes the following retirement benefit expenses:
[ € ‘000 ]
2012
2011
11,577
9,343
Annual average number of employees:
Annual average number of employees
Salaried staff
Wage earners
2012
2011
10,099
9,489
51,362
48,857
61,461
58,346
The Group employed 59,393 people on the balance sheet date (previous year: 60,745), of which 55,221 worked
outside Germany (previous year: 56,728).
[ 32 ] Performance-related compensation with a long-term component
The members of the Management Board receive, in addition to fixed annual compensation and a perfor-
Company information
205
mance-related short-term and medium-term compensation component (annual and multi-year bonus), a
long-term component with risk character. The short and medium-term performance-related compensation
component is computed based on consolidated net income.
The long-term compensation component is computed based on the Company’s economic value added
(EVA) and the market performance of its share, and is shown in a bonus account. An amount is paid out annually from this bonus account up to a cap, 50 percent of which members of the Management Board must invest
in LEONI shares and which must be retained for a period of 50 months. Negative business performance will reduce the bonus account (penalty rule), which can drop to nil. In the financial year, a liability for this long-term
for the long-term compensation component in fiscal 2012 was € 768 k (previous year: € 907 k). The payout was
€ 934 k (previous year: € 816 k).
[ 33 ] Transactions with related parties
compensation component was recognised in the amount of € 1,643 k (previous year: € 1,691 k). The expense
The compensation for management in key positions within the Group that is subject to mandatory disclosure
under IAS 24 comprises the compensation for active members of the Management Board and the Supervisory Board. In addition to the compensation for Supervisory Board members, other payments must also be
reported.
Compensation for active Management and Supervisory Board members
Compensation of the Management Board is summarised as follows:
[ € ‘000 ]
2012
2011
Benefits due in the short term
5,864
5,456
Benefits due in the long term
1,466
689
Performance-related compensation with a long-term component
768
8,098
907
7,052
Post-employment benefits
585
609
8,683
7,661
(board member compensation)
206
The short-term benefits include, along with the fixed compensation, a variable component of € 3,785 k (previous year: € 3,510 k). The long-term benefits involve the medium-term compensation component, which is paid
in the fourth year, while 50 percent of the amount is paid in the subsequent year as an instalment.
The expense incurred by the total receipts of the Management Board members pursuant to Article 314 (1)
No.6a of the German Commercial Code was € 8,098 k (previous year: € 7,052 k). Article 314 (1) No.6a of the
German Commercial Code provides that expenditure on pensions need not be included in the receipts of the
Management Board members.
The basic principles of the compensation system and the receipts of individual Management Board members pursuant to Article 314 (1) No.6a of the German Commercial Code are presented in the management
report.
Provided that the annual shareholders’ meeting approves the dividend proposal, the total compensation in
the year under report of the Supervisory Board will be € 1,366 k (previous year: € 1,364 k), of which the variable
share of compensation is € 630 k (previous year: € 630 k).
The receipts of the individual Supervisory Board members are presented in the management report.
Compensation for employee-representative members of the Supervisory Board
The employee-representatives on LEONI AG’s Supervisory Board received compensation based on their service
contracts at LEONI. LEONI’s related expenses were € 423 k (previous year: € 408 k). On 31 December 2012 there
were liabilities in the amount of € 43 k (previous year: 51 k) pertaining to service contracts with employeerepresentative members of the Supervisory Board.
Compensation for former Management Board members
The receipts in the financial year of former members of the Management Board and their surviving dependants amounted to € 254 k (previous year: € 251 k). There is provision for the pension obligations vis-à-vis former members of the Management Board and their surviving dependants in the amount of € 3,369 k (previous
year: € 3,241 k).
Joint ventures and associated companies
The Group had business relationships with joint ventures. Transactions with these related parties result from
normal trade in goods and services and were concluded on standard market terms. The extent of these business relationships is presented in the following table.
[ € ‘000 ]
Purchases/sales
from/to related parties
Joint Ventures
Fiscal year
Income from sales
and services
to related parties
Purchases from
related parties
Amounts due from
related parties
Amounts due to
related parties
12/2012
31
1,692
1
323
12/2011
3,882
2,642
2,867
988
Company information
207
[ € ‘000 ]
Joint Ventures
Fiscal year
Interest received
Amounts owed
by related parties
12/2012
1
0
12/2011
37
0
Other relationships with related parties
Dr Bernd Rödl has been a member of the Supervisory Board since 14 May 2009. Various entities of the
Rödl & Partner company performed services for the Group. All consulting and other services sourced were
invoiced on standard market terms.
Ms Ingrid Hofmann has been a member of the Supervisory Board since 12 May 2011 and is managing
Loans to related parties
partner of I.K. Hofmann GmbH. The company is a temporary employment business with subsidiaries in Austria,
the Czech Republic, the United Kingdom and the United States from which LEONI sourced services that were
invoiced on standard market terms.
Dr Werner Lang has been a member of the Supervisory Board since 16 May 2012 and is managing director of
Lang Verwaltungsgesellschaft mbH and thereby of MEKRA Lang GmbH & Co. KG, Ing. H. Lang GmbH & Co. KG,
Lang Technics GmbH & Co. KG as well as Grundstücksgesellschaft Lang GbR. In the 2012 financial year LEONI
market terms.
The goods and services sourced from the aforementioned related parties totalled € 549 k (previous year:
€ 1,315 k). On 31 December 2012 there were liabilities to these related parties in the amount of € 103 k (previous year: € 126 k) and receivables from them in the amount of € 44 k (previous year: € 0 k).
There were no other reportable transactions with related parties.
sold product to MEKRA Lang GmbH & Co. KG. in the amount of € 579 k. The goods were supplied on standard
208
[ 34 ] Declaration pertaining to the German Corporate Governance
Code pursuant to Article 161 of the German Public Companies Act (AktG)
In December 2012, the Management Board and the Supervisory Board issued the updated Declaration of Conformity pursuant to Article 161 of the German Public Companies Act and made this available to shareholders
on a permanent basis by publishing it on the internet (www.leoni.com). The Declaration of Conformity is also
included in the Corporate Governance Report, which is published in the 2012 Annual Report.
LEONI AG
Dr Klaus Probst
Dieter Bellé
Dr Andreas Brand
Company information
209
210
Ownership
in %
Ownership
in %
LEONI Silitherm s.r.l., Monticelli d’Ongina, Italy
100
I. Consolidated companies
Outside Europe
LEONI AG, Nuremberg, Germany
1. Wire & Cable Solutions Division
Federal Republic of Germany
LEONI Fiber Optics Inc., Meza, Arizona, USA
100
LEONI (M) Sdn. Bhd., Subang Jaya, Malaysia
75
LEONI (S.E.A.) Pte. Ltd., Singapore
75
LEONI (Thailand) Co. Ltd., Bangkok, Thailand
75
LEONI Kabel Holding GmbH, Nuremberg
1)
100
LEONI Cable Maroc SARL, Casablanca, Morocco
100
LEONI Kabel Verwaltungs-GmbH, Nuremberg
1)
100
LEONI Cable (Changzhou) Co. Ltd., Changzhou, China
100
Haarländer GmbH, Roth
1)
100
LEONI Cable (Xiamen) Co. Ltd., Xiamen, China
KB Kabel Beteiligungs-GmbH, Nuremberg
100
100
100
100
LEONI Cable Inc., Rochester, Michigan, USA
2)
LEONI Kabelsysteme GmbH, Neu-Ulm
1)
100
LEONI Cable S.A. de C.V., Cuauhtémoc, Chihuahua, Mexico
2)
LEONI Cable Assemblies GmbH, Roth
1)
100
LEONI Elocab Ltd., Kitchener, Ontario, Canada
100
LEONI Draht GmbH, Nuremberg
1)
100
LEONI elocab GmbH, Georgensgmünd
1)
100
LEONI Engineering Products & Services Inc.,
Lake Orion, Michigan, USA
100
LEONI Special Cables (Changzhou) Co. Ltd., Changzhou, China
100
LEONI Wire (Changzhou) Co. Ltd., Changzhou, China
100
LEONI Fiber Optics GmbH, Neuhaus-Schierschnitz
1)
100
LEONI HighTemp Solutions GmbH, Radevormwald
1)
100
LEONI Kabel GmbH, Nuremberg
LEONI Kerpen GmbH, Stolberg
1)
1)
100
100
LEONI protec cable systems GmbH, Schmalkalden
1)
100
LEONI Special Cables GmbH, Friesoythe
1)
100
LEONI Studer Hard GmbH, Bautzen
j-fiber GmbH, Jena
LEONI Wire Inc., Chicopee, Massachusetts, USA
100
2)
LEONI Wire & Cable Solutions Japan K.K., Nagakute-cho, Japan
100
99
LEONI Middle East FZE, Dubai, United Arab. Emirates
100
100
1)
j-plasma GmbH, Jena
FiberCore Machinery Jena GmbH, Jena
LEONI Cable Solutions (India) Private Limited, Mumbai, India
100
2. Wiring Systems Division
100
1)
100
Federal Republic of Germany
LEONI Bordnetz-Systeme GmbH, Kitzingen
Other European countries
1)
LEONI Con-Tech GmbH, Roth
(formerly: neumatic Elektronik + Kabeltechnik
Verwaltungs-GmbH, Ulm)
100
100
LEONI Cable Belgium N.V., Hasselt, Belgium
100
LEONI Cable Slovakia spol. s.r.o., Stará Turá, Slovakia
100
LEONI CIA Cable Systems S.A.S., Chartres, France
100
Other European countries
LEONI Furas S.L., Piera, Spain
100
LEONI Autokabel Polska sp. z o.o., Ostrzeszów, Poland
100
100
LEONI Autokabel Slowakia spol. s.r.o.,Trencin, Slovakia
100
LEONI Wiring Systems Arad SRL, Arad, Romania
100
100
LEONI Wiring Systems France S.A.S.,
Montigny-le-Bretonneux, France
100
100
LEONI Wiring Systems Pitesti SRL, Pitesti, Romania
100
LEONI Wiring Systems Italy s.r.l., Felizzano, Italy
LEONI Studer AG, Däniken, Switzerland
100
LEONI Wiring Systems RO SRL, Bistrita, Romania
100
LEONI Tailor-Made Cable UK Limited,
Chesterfield, Derbyshire, United Kingdom
100
LEONI Wiring Systems Spain SL,
Santa Perpetua/Barcelona, Spain
100
LEONI Wiring Systems U.K. Ltd.,
Newcastle-under-Lyme, Staffordshire, United Kingdom
100
LEONI Wiring Systems UA (GmbH), Strij, Ukraine
100
LEONI Kabel Polska sp. z o.o., Kobierzyce, Poland
LEONI Kablo ve Teknolojileri Sanayi ve Ticaret Limited Sirketi,
Mudanya, Turkey
LEONI Slowakia spol. s.r.o., Nová Dubnica, Slovakia
LEONI Special Cables Iberica S.A., Barcelona, Spain
LEONI Schweiz AG, Däniken, Switzerland
95
LEONI Temco Ltd., Cinderford, Gloucestershire, United Kingdom
100
LKH LEONI Kábelgyár Hungaria Kft., Hatvan, Hungary
100
neumatic cz s.r.o., Turnov, Czech Republic
100
100
3)
100
Ownership
in %
Ownership
in %
LEONI Wiring Systems Viana Lda., Viana do Castelo, Portugal
100
Leonische Portugal Lda., Lugar de Sao Martinho,
Guimaraes, Portugal
100
OOO LEONI Wiring Systems (RUS), Nabereznye Chelny, Russia
100
OOO LEONI Wiring Systems Zavolzhie, Zavolzhie, Russia
(formerly: OOO Lik Avto Gorodets, Russia)
100
LEONI Wiring Systems Southeast d.o.o., Prokuplje, Serbia
100
II. Associated companies and joint ventures
100
LEONI Electrical Systems (Shanghai) Co. Ltd., Shanghai, China
100
LEONI Wiring Systems Tunisia SARL, Messadine, Tunesia
(formerly: LEONI Tunisia Group Sarl, Messadine, Tunesia)
100
LEONI Wiring Systems (Changchun) Co. Ltd., Changchun, China
100
LEONI Wiring Systems (Liuzhou) Co. Ltd., Liuzhou, China
100
LEONI Wiring Systems Aïn Sebâa SA,
Aïn Sebâa, Casablanca, Morocco
100
LEONI Wiring Systems Bouskoura SA, Bouskoura, Morocco
100
LEONI Wiring Systems Bouznika SA, Bouznika, Morocco
100
LEONI Wiring Systems de Durango S.A. de CV, Chihuahua, Mexico
100
LEONI Wiring Systems Egypt S.A.E., Nasr City, Kairo, Egypt
100
LEONI Wiring Systems Inc., Tucson, Arizona, USA
100
LEONI Wiring Systems Mexicana S.A. de C.V., Hermosillo, Mexico
100
LEONI Wiring Systems de Hermosillo S.A. de C.V.,
Hermosillo, Mexico
100
LEONI Wiring Systems (Pune) Pvt. Ltd., Pune, India
100
LEONI Wiring Systems Korea Inc., Busan, Korea
(formerly: Daekyeung T&G Co. Ltd., Busan, Korea)
100
LEONI Electrical Systems (Jining) Co. Ltd., Jining, China
(formerly: Daekyeung Electrical Systems Jining Co. Ltd,
Jining, China)
100
Weihai Daekyeung Electronic Device Assemble Co. Ltd.,
Weihai, China
100
Weihai DK Electronic Co. Ltd., Weihai, China
100
LEONI Electrical Systems (Penglai) Co. Ltd., Penglai, China
(formerly: Penglai Daqing Wiring Systems Co. Ltd., Penglai, China)
100
Intedis GmbH & Co. KG, Würzburg, Germany
50
Intedis Verwaltungs-GmbH, Würzburg, Germany
50
Intedis Inc., Plymouth, Michigan, USA
50
Intedis E/E-Engineering and Technology (Shanghai) Co. Ltd.,
Shanghai, China
50
LEONI Furukawa Wiring Systems SAS,
Montigny-le-Bretonneux, France
50
LEONI Automotive do Brasil Ltda., Itú, Saõ Paulo, Brazil
Outside Europe
Company information
211
Companies that make use of the exemption under Article 264, Section 3
of the German Commercial Code.
2)
These companies are legally part of the Wiring Systems Division.
3)
This company is legally part of the Wire & Cable Solutions Division.
1)
212
Audit Opinion
Translation of the German audit opinion concerning the audit of the financial statements prepared in German:
We have audited the consolidated financial statements prepared by LEONI AG, Nuremberg, comprising the
income statement, the statement of comprehensive income, the statement of cash flows, the statement of
financial position, the statement of changes in equity and the notes to the consolidated financial statements,
together with the group management report for the fiscal year from January 1 to December 31, 2012. The
preparation of the consolidated financial statements and the group management report in accordance
with IFRS as adopted by the EU, and the additional requirements of German commercial law pursuant to
Sec. 315a (1) HGB [“Handelsgesetzbuch”: German Commercial Code] are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the consolidated financial statements and the
group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with Sec. 317 HGB and
German generally accepted standards for the audit of financial statements promulgated by the Institut der
Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW) as well as the International Standards on
Auditing (ISA). Those standards require that we plan and perform the audit such that misstatements materially
affecting the presentation of the net assets, financial position and results of operations in the consolidated
financial statements in accordance with the applicable financial reporting framework and in the group
management report are detected with reasonable assurance. Knowledge of the business activities and the
economic and legal environment of the Group and expectations as to possible misstatements are taken into
account in the determination of audit procedures. The effectiveness of the accounting-related internal control
system and the evidence supporting the disclosures in the consolidated financial statements and the group
management report are examined primarily on a test basis within the framework of the audit. The audit
includes assessing the annual financial statements of the entities to be included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and
significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements and the group management report. We believe that our audit provides a reasonable
basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with
IFRS as adopted by the EU, the additional requirements of German commercial law pursuant to Sec. 315a (1)
HGB and give a true and fair view of the net assets, financial position and results of operations of the Group
in accordance with these requirements. The group management report is consistent with the consolidated
financial statements and as a whole provides a suitable view of the Group’s position and suitably presents
the opportunities and risks of future development.
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Broschulat
Schütz
Wirtschaftsprüfer
Wirtschaftsprüfer
[German Public Auditor]
[German Public Auditor]
213
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated
financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the
Group, and the group management report includes a fair review of the development and performance of the
Company information
business and the position of the Group, together with a description of the principal opportunities and risks
associated with the expected development of the Group.
Dieter Bellé
Dr Andreas Brand
Dr Klaus Probst
Extract from the financial statement of
LEONI AG
215
217
Ten-year overview
218
220
Glossary
222
Index of key words
224
215
LEONI AG Income statement
2012
2011
95,495
82,536
21,891
20,026
3,079
2,804
(24,970)
(22,830)
(3,988)
(2,870)
4. Other operating expenses
(64,033)
(45,137)
5. Income from profit transfer agreement
104,017
82,768
13,173
12,489
7,783
10,781
[ € ‘000 ] 01/01 – 31/12
under HGB
1. Other operating income
Company information
Extract from the financial statement of LEONI AG
3. Amortisation of intangible investment assets and depreciation of
property, plant and equipment
6. Income from financial loans
7. Other interest and similar income
8. Writedowns on investments
(424)
(699)
(31,666)
(33,604)
10. Income before taxes
95,387
83,434
11. Income taxes
(2,085)
(4,565)
9. Interest and similar expenses
12. Other taxes
(27)
(27)
13. Net income
93,275
78,842
1,780
1,941
(45,000)
(30,000)
50,055
50,783
14. Earnings brought forward from the previous year
15. Transfer to other retained earnings
16. Retained income
b) social security contributions and expenditure for retirement benefits and support payments
a) salaries
2. Personnel expenditure:
216
LEONI AG Balance sheet
under HGB
[ € ‘000 ]
Assets Intangible assets
2012
2011
5,078
5,288
5,201
4,480
Shares in affiliated companies
488,824
488,824
Loans to affiliated companies
282,752
198,591
Other loans
1,013
1,152
Investments
772,589
688,567
Fixed assets
782,868
698,335
523,885
498,295
207,014
291,225
730,899
789,520
Current assets
Deferred charges
Total assets
Equity and Equity (contingent capital € 14,850 k)
liabilities
Pension plans and similar obligations
Tax provisions
1,406
1,325
1,515,173
1,489,180
545,679
501,407
12,280
11,469
388
3,204
Other provisions and accruals
26,892
23,273
Provisions and accruals
39,560
37,946
Debt
510,002
550,466
Other liabilities
419,932
399,361
1,515,173
1,489,180
217
Retained earnings for fiscal 2012 determined
under the German Commercial Code (HGB)
amount to
€ 50,054,826.57
Company information
We propose to pay a dividend from this
distributable profit of € 1.50 per share,
equal to a payout of
The remainder of
€ 49,003,500.00
€ 1,051,326.57
has to be carried forward.
LEONI AG
218
Ten-year overview
under IFRS
Sales
Expenses
2012
2011
2010
3,809,007
3,701,487
2,955,671
Germany [ % ]
27.0
28.8
31.8
EU (without Germany) [ % ]
35.6
39.4
39.5
Non EU countries [ % ]
37.4
31.8
28.7
Wire & Cable Solutions [ % ]
42.1
45.3
44.7
Wiring Systems [ % ]
57.9
54.7
55.3
2,294,370
2,238,455
1,738,408
Group [ € ‘000 ]
Cost of materials [ € ‘000 ]
Cost of materials [ % of sales ]
60.2
60.5
58.8
Personnel expenses [ € ‘000 ]
732,307
669,119
607,687
Personnel expenses [ % of sales ]
19.2
18.1
20.6
116,202
107,045
110,282
3.1
2.9
3.7
EBITDA [ € ‘000 ]
352,013
344,186
241,006
EBIT [ € ‘000 ]
235,811
237,141
130,724
6.2
6.4
4.4
Income / loss before taxes (from continuing operations) [ € ‘000 ]
197,888
196,250
89,599
Depreciation and amortisation [ € ‘000 ]
Depreciation and amortisation [ % of sales ]
Earnings
EBIT margin [ % ]
Cash flow
Balance sheet
Net income / loss [ € ‘000 ]
156,021
155,959
67,246
Cash provided by operating activities [ € ‘000 ]
211,710
246,105
142,297
Cash used for capital spending activities [ € ‘000 ]
125,499
126,901
95,512
Free cash flow before acquisitions and divestments [ € ‘000 ]
63,483
121,194
50,697
Property, plant and equipment, intangible assets, goodwill [ € ‘000 ]
917,691
837,693
809,617
132.7
128.4
93.5
Net debt [ € ‘000 ]
249,169
233,922
444,558
Equity [ € ‘000 ]
Reinvestment rate [ % ]
845,128
737,481
481,160
Equity [ % of balance sheet total ]
35.4
31.8
23.8
Return on equity (ROE) [ % ]
18.5
21.1
14.0
Return on capital employed (ROCE) [ % ]
20.8
24.0
13.9
59,393
60,745
55,156
Employees
Employees [ as per 31 December ]
Share
Market capitalisation 31 December [ € million ]
employed abroad [ % ]
93.0
93.4
93.2
932.7
841.2
978.6
Consolidated net income / loss per share [ € ]
4.76
4.99
2.26
Dividend per share [ € ]
1.50
1.50
0.70
5.3
5.8
2.1
Dividend yield [ % ]
2007
2006
2005
2004
2003
2,366,779
2,108,244
1,547,973
1,250,193
1,079,856
34.4
31.4
38.1
41.2
45.3
42.2
46.8
29.2
42.0
44.6
34.1
32.2
32.7
32.2
23.6
24.0
27.8
26.6
22.0
25.6
24.0
43.3
48.1
58.3
54.7
43.2
45.4
48.4
56.7
51.9
41.7
45.3
56.8
54.6
51.6
1,253,333
1,767,181
1,434,792
1,248,514
848,710
661,098
533,928
58.0
60.7
60.6
59.2
54.8
52.9
49.4
530,663
596,194
449,276
399,412
330,406
290,152
263,323
24.6
20.5
19.0
18.9
21.3
23.2
24.4
111,457
110,229
72,669
64,255
56,737
58,302
51,487
5.2
3.8
3.1
3.0
3.7
4.7
4.8
(4,862)
165,913
210,771
193,629
159,144
107,267
101,113
(116,319)
55,684
138,102
130,574
102,829
56,750
49,626
(5.4)
1.9
5.8
6.2
6.6
4.5
4.6
(157,309)
15,760
116,531
116,599
88,830
41,334
36,961
(138,081)
5,197
86,219
79,325
56,093
27,674
22,099
88,783
132,726
190,837
136,099
111,071
83,923
35,927
87,000
137,256
401,464
181,376
81,923
89,009
83,500
2,122
(13,924)
101,372
60,649
46,797
6,870
(47,573)
796,567
839,423
537,482
489,198
396,495
361,868
336,546
73.4
143.7
128.9
130.2
114.6
136.5
190.3
495,367
533,225
473,211
236,912
167,489
160,566
271,035
369,126
447,688
525,642
481,701
427,152
364,903
225,908
21.0
24.2
32.9
35.1
40.6
41.6
31.1
(37.4)
1.2
16.4
16.5
13.1
7.6
9.8
(12.0)
5.4
15.4
18.9
17.3
10.5
9.9
49,822
50,821
36,855
35,129
32,638
29,957
21,392
92.4
91.7
89.0
89.0
88.7
89.9
86.4
485.6
385.8
997.9
917.7
799.8
495.0
323.4
(5.04)
0.17
2.87
2.64
1.89
1.12
1.12
0.00
0.20
0.90
0.80
0.57
0.42
0.38
0
1.5
2.7
2.6
2.1
2.5
2.3
2008
2,911,964
2009
2,160,117
under US-GAAP
Company information
219
220
As a member of the UN Global Compact, LEONI commits itself to fulfilling the ten principles described therein,
which cover human rights and labour law, environmental protection as well as combating corruption. LEONI
already applies many of these principles. The index below refers to corresponding information. More detail
can be found in our annual UN Global Compact Communication on Progress (COP), which was first published
on our website in 2012. The next report will probably be issued in mid 2013.
UN Global Compact Principles
LEONI AG implementation
Annual Report / Website
LEONI Social Charta
Art. 1 Fundamental objectives
1.1 Human rights
www.leoni.com /
Company / Corporate Responsibility
Human rights
Companies shall …
Principle 1
support and observe the protection of
international human rights within their sphere
of influence and …
COP*, pages 6-7, 14
Principle 2
ensure that they are not complicit
in human rights abuses.
LEONI Social Charta
Art. 2 Implementation, 2.3
www.leoni.com /
COP*, pages 6-7, 14
Labour standards
Companies shall …
Principle 3
safeguard the freedom of association and effective
recognition of the right to collective negotiations
as well as strive towards …
LEONI Social Charta
1.2 Freedom of association
www.leoni.com /
COP*, pages 8-9, 14
Principle 4
the eradication of forced labour in all forms, …
LEONI Social Charta
1.4 Free choice of employment
www.leoni.com /
COP*, pages 8-9, 14
Principle 5
the abolition of child labour and …
LEONI Social Charta
1.5 No child labour
www.leoni.com /
COP*, pages 8-9, 14
Principle 6
the eradication of discrimination in recruitment
and employment.
LEONI Social Charta
1.3 No discrimination
www.leoni.com /
LEONI Code of Ethics
3. h)
www.leoni.com /
COP*, pages 8-9, 14
Company information
221
UN Global Compact Principles
LEONI AG implementation
Annual Report / Website
ISO 14001 –
Environmental certification
page 104
Environmental protection
measures
pages 103, 104
Principle 7
support a pre-emptive approach in dealing
with environmental problems, …
COP*, pages 10-11, 15
Principle 8
launch initiatives to instil greater awareness
of responsibility for the environment, and …
page 104
measures
pages 103, 104
Companies shall …
COP*, pages 10-11, 15
Green Technology
page 105
COP*, pages 10-11, 15
Anti-corruption
Companies shall …
Principle 10
commit themselves to combat all forms of
corruption, including blackmail and bribery.
LEONI Code of Ethics
3. a), d), e), g), i), j)
www.leoni.com /
COP*, pages 12-13, 15
Principle 9
promote the development and spread of
environmentally friendly technologies.
page 109
*COP: Communication on Progress, UN Global Compact COP Report
222
Glossary
A
ABS
Anti-lock braking system
Alternative
drive technologies
Power engine with hybrid, electric
or fuel-cell technology
Asset deal
Purchase of all the economic goods of a
company
B
BRIC countries
Brazil, Russia, India, China
C
Capital Employed
Non-interest bearing assets less noninterest bearing liabilities
Capital goods industry
D
Branches of industry that make products to
manufacture others; for example the mechanical engineering and electro-technical
industries
Organisation for global climate change
reporting
Cash flow
Balance of cash inflow and outflow; key
figure for assessing financing resources
Compliance
Adherence to legal requirements and
corporate guidelines
Responsible business management
Coverage
Regular monitoring of a company by
financial analysts
D & O insurance
Insurance for Members of the Supervisory
Board and Members of the Management
Board
DEL quote
Copper price quote
(Deutsche Elektrolyt-Kupfer-Notierung
= German electrolyte copper quote)
Demographic change
Change in the age structure of a society
Derivatives
Financial instruments whose price or value
depends on the prices of other merchandise
E
F
G
H
EBIT
Earnings before interest and taxes
EBIT margin
EBIT / sales
Economic Value Added (EVA)
Increase in enterprise value taking the cost
of capital into consideration
EMAS
Eco-Management and Audit Scheme;
an EU system for auditing the environmental management of companies
ESP
Electronic Stability Program
Factoring
Sale of receivables
Financial covenants
Provisions included in a loan agreement
Free cash flow
Performance of operating cash flow taking
capital expenditures into consideration
Gearing
Ratio of net debt to equity
Global trends
Future social developments
Green Technology
Environmentally compatible and sustainable technologies for generating renewable
energy as well as for reducing energy and
resource consumption
Hedge accounting
Reporting of various financial instruments
that are in a hedging relationship
Hybrid cable
Cable that combines differing individual
cables (e.g. power and data cables)
Impairment tests
Review of the value of asset items
Interest rate swaps, collars
Interest rate hedging instruments
Internal Control System (ICS)
Principles and procedures to ensure the
efficiency of corporate governance, the
reliability of accounting and adherence to
pertinent legal requirements
Just-in-sequence delivery
Delivery in the required sequence
Just-in-time delivery
Delivery in the required time
LVDS
Low Voltage Differential Signalling;
interface standard for high-speed data
transmission
M Monte-Carlo simulation
Simulation method based on multiple trial
runs using random variables
N NAFTA
North American Free Trade Agreement
(Canada, Mexico, USA)
R
(Net financial debts)
Financial liabilities less cash and
cash equivalents
R&D
Restructuring expenses
Spending on the reorganisation or closure
of a facility; especially on severance payments
Return on Sales
EBIT/Sales
ROCE
S
U
Segment
Division
SHE
Safety, Health, Environment
Single source supply
Sourcing from a single supplier
Solar heat
Conversion of solar power into useable
thermal energy
Strand
Combination of a number of single wires
SWOT
Strengths, Weaknesses, Opportunities,
Threats
Urbanisation
Increasing urban development
USB
Universal Serial Bus (serial bus system
for connecting a computer with external
devices)
W WACC
Weighted Average Cost of Capital
Wiring System
A vehicle’s network of electrical/electronic
cables including components
Working Capital
Net current assets (inventories plus trade
receivables less trade liabilities)
L
Write-downs such as amortisation of the
godwill of a subsidiary whose business
prospects have worsened
J
Impairment of
non-current assets
I
Company information
223
224
Index of key words
A Acquisitions 50, 158
G Global trends 52
Additional disclosure 196
– Group 134
Goodwill 89, 134, 144, 175
Additional paid-in capital 135, 186
– LEONI AG 166
Green Technology 105
Appropriation of profits 217
Contingencies 187
Group Management report 48 ff
Asset situation 87, 127
Copper price 91
Group structure back cover page
Audit 11, 39
Cost items 60
Audit opinion 212
Currency risks 116, 193
Auditor 11 f
Current liabilities 134, 177
Auditor´s professional fees 204
Customer relationships 65, 71
Authorised capital 204
H Hedge Accounting 148
Hedging activities 148
I
D Deferred taxes 134, 161
Income 132
Income from associated companies 177
Depreciation 133
Income taxes 164
Business basis 49
Dividend 12, 42,186
Intangible assets 63, 89, 173
Business by sector 61
Dividend policy 126
Integrated opportunity management 113
B Business and underlying conditions 43
Business performance
– Group 125
Interest rate risks 83, 191
E Earnings per share 150, 203
Internal control system 223
– Wire & Cable Solutions 77f
EBIT
Inventories 141, 170
– Wiring Systems 69
– Group 63
Investor Relations 46
Business policy 126
– Wire & Cable Solutions 75
IT risks 115
C Capital expenditure
Electromobility 66, 70, 97, 119
K Key dates back cover page
– Group 63
Employees
– Group 92
Liabilities 145 ff
Claims 187
Liability risks 117
Compensation report 54
Environmental management 117
Liquidity 82
Competitive advantages 66, 72
Equity 88, 185
Litigations 187
Compliance management system 97
Equity ratio 87
Consolidated financial statements 130 ff
Estimates 151
Exchange rate on the balance sheet date 138
– Group 131
– LEONI AG 166
L Leasing 83, 142, 187
M Management Board, compensation 54
Management Board, members 16
Management Board, shareholdings 40
F Finance revenue and costs 164
Management system 53
Consolidated sales 53, 63, 64, 79
Financial debts 178
Market risks 113
Financial year survey front cover page
Markets 50
Consolidated statement of cash flows 85
Forecast 122
Consolidated statement of changes in equity 135
Foreign currency translation 138
Consolidated statement of comprehensive
income 132
Forward exchange transactions 198
N New accounting requirements 153
Notes 136 ff
Free cash flow 53, 63, 86, 125
O Other assets 170
Other comprehensive income 132, 168
Other obligations 187
Other operating expenses 163
Other performance indicators 90
Other provisions 149
Order receipts 75
Overall risk 118
Overview
S Sales
– economy 59 f
– Group 79 f
– Group 79
Scope of consolidation 158, 210
Company information
225
Segment reporting 151, 201
Share 42
Performance 63
Share capital 42, 57, 107, 185
Performance related compensation 94, 205
Share price performance 42
Personnel expenses 204
Shareholder structure 44
Personnel risks 115
Shareholders‘ Letter 3
Principal facilities 50
Shareholdings 40
Principles (Notes) 136
Principles of consolidation 136
137, 177
Procurement 90
Statement of cash flows 85, 133, 150
Product range
Statutory reserve 186
Strategy 51
Supervisory Board, committees 15
Property, plant and equipment 89, 141, 171
Supervisory Board, compensation 57
Provisions 180
Supervisory Board, members 14f
Purchase order commitments 187
Supervisory Board, report 9
Supplementary report 109
R Receivables 146, 188
Regions 61, 123
Supplier collaborations (Supplier Capital) 91
P Pension provisions 181
SWOT analysis 121
Reports by division 65
T Ten-year overview 218
– objectives 96
Trade liabilities 179
– projects 98
Transactions with related parties 205
– spending 97
Risk and opportunity report 109 ff
U Underlying conditions 49
Risk management and financial derivatives 188
Risks related to raw material prices 195
V Valuation methods 136
Risk policy 109
Risk management system 109f
226
Forward-looking statements
This report contains forward-looking statements that are based
on management’s current assumptions and estimates concerning
future trends. Such statements are subject to risk and uncertainty
that LEONI cannot control or precisely assess. Should imponderables
occur or assumptions on which these statements are based
prove to be incorrect, actual results could deviate considerably
from those described in these statements. LEONI assumes no
obligation to update forward-looking statements to adjust them
to events following publication of this report.
Principal
facilities of the
LEONI Group
USA
Chicopee
Tucson
Mexico
Hermosillo
Durango
Cuauhtémoc
Brazil
Itú
Tunisia
Sousse
Mateur Nord
Mateur Sud
Morocco
Aïn Sebâa
Bouskoura
Bouznika
Egypt
Cairo
Germany
Nuremberg (Holding)
Kitzingen
Roth
Bad Kötzting
Weißenburg
Georgensgmünd
Stolberg
Friesoythe
NeuhausSchierschnitz
Group
structure
BMW Group
Fiat
GM &
Components
United Kingdom
Newcastle
Czech Republic
Turnov
Serbia
Prokuplje
Portugal
Guimarães
Slovakia
Trencin
Ilava
Stará Turá
Nová Dubnica
Poland
Kobierzyce
Switzerland
Däniken
Hungary
Hatvan
France
Montigny
Jaguar
Land Rover
MercedesBenz
PSA
Renault,
Nissan
VW Group
Wiring Systems
Components
Holding
Connectivity
Wire & Cable
Solutions
Automotive Cables
Industry & Healthcare
Communication & Infrastructure
Automotive Standard Cables
Telecommunication Systems
Infrastructure & Datacom
Automotive Special Cables
Fiber Optics
Industrial Projects
Electrical Appliance Cables
Industrial Solutions
Solar & Wind Power
Healthcare
Energy & Communication
Irradiation Services
Traffic
Electrical Appliance
Assemblies
Electrical Appliance
Assemblies
Russia
Zavolzhye
Naberezhnye Chelny
Ukraine
Striy
Commercial
Vehicles
Americas
Wiring Systems
China
Jining
Romania
Arad
Piteşti
Bistrita
Penglai
Shanghai
Changzhou
Xiamen
Principal
production facilities
Competence centres
Locations
> 100 employees
India
Pune
South Korea
Seoul/Busan
Suppliers
International
Russia
Electromobility
Asia
Conductors & Copper Solutions
China
Special Conductors
Copper Solutions
as of January 2013
Key dates Press Conference
on financial statements 2013
20 March 2013, 10:00 hours
Nuremberg
Analyst and Investor Meeting 2013
21 March 2013, 11:00 hours
Frankfurt
Annual General Meeting 2013
30 April 2013, 10:00 hours
Nuremberg
Annual Report 2012
20 March 2013
Interim Report 1st Quarter 2013
14 May 2013
Interim Report 1st Half 2013
13 August 2013
Interim Report Quarters 1 to 3 2013
12 November 2013
Preliminary Figures 2013
February 2014
Contact
Investor Relations
Susanne Kertz
Phone +49 (0)911-2023-274
Fax
+49 (0)911-2023-209
Frank Steinhart
Phone +49 (0)911-2023-203
Fax
+49 (0)911-2023-10203
E-mail [email protected]
LEONI AG
Marienstrasse 7
90402 Nuremberg
Phone +49 (0)911-2023-0
Fax
+49 (0)911-2023-455
E-mail [email protected]
www.leoni.com

Annual Report 2012

Transcrição

Documentos relacionados

Interim report 1st quarter 2015

Declaration of Compliance with the German Corporate Governance

New Gesneriaceae from Minas Gerais, Brazil

PDF - Teixeira Duarte

obligatory information pursuant to § 1 VVG-Info

Datasheet for RAYT158-50JFNA

as pdf-file

Kansa Übersicht_MTE und MWT 8.12.07

Charts - Helaba

technical data