Although revenues have now returned to pre-pandemic levels, earnings at German cable and wiring systems specialist Leoni (Nuremberg; www.leoni.com) remain in the red. As a result, the company is moving forward with the divestment of its Wire & Cable Solutions (WCS) division by selling a large part of the unit to its much smaller competitor BizLink (Taipei / Taiwan; www.bizlinktech.com). The deal is expected to be finalised by early 2022, subject to all official approvals.

The Taiwanese supplier of cables and systems for IT, automotive, E&E, medical technology and industrial applications is to pay EUR 450m for the WCS industrial solutions subdivision. With 20 Leoni locations and 3,000 employees covered by the deal, BizLink will grow primarily in the European market, where it is not yet strongly established and currently only runs two plants in Serbia and Slovakia. Pro forma turnover is also set to increase significantly: the EUR 430m in sales from the Leoni segment will be added to the company’s own income of some EUR 700m in the 2020 financial year. BizLink CEO Felix Teng should be pleased with the new size.

Leoni operations sold in 2020 accounted for turnover of around EUR 430m, ie a good quarter of the company’s total sales at the time. After all deductions, the group will be left with around EUR 300m, which it plans to use to strengthen liquidity. There seems to be no thought of debt repayment yet, although this mountain has continued to grow and now amounts to more than EUR 1.5 bn.

Once its Value 21 strategy programme has been fully implemented, Leoni intends to focus on its business as a supplier of wiring systems for the automotive industry. Under CEO Aldo Kamper, the company had already divested itself of some smaller WCS units in recent months. Currently, the two divisions – both WCS and Wirings Systems (WSD), which is supposed to be kept on board – have returned to 2018 turnover levels. However, the results still leave a lot to be desired, even though Leoni raised its forecast for 2021 after releasing half-year figures (see Plasteurope.com of 09.08.2021). On the other hand, investments were almost halved this year.