Its equal joint venture in China will give Leoni the opportunity to gain new orders from BBAC and other carmakers. The joint venture will be a key element for Leoni with respect to expanding its business in Asia disproportionately strongly in line with its strategy of profitable growth. All of Leoni’s other activities in China are unaffected; they will continue to exist outside the new joint venture and will likewise be developed further.
Based on the IFRS accounting principles, the joint venture will be accounted for by the equity method in the consolidated financial statements of Leoni AG. There will be no notable effects on sales or operating profit during the current financial year. It will, on the other hand, mean consolidated sales of approx. EUR 4.8 billion in fiscal 2016 rather than the EUR 5 billion forecast previously. The target for a 7 percent EBIT margin remains unchanged. Long-term, the joint venture will contribute to further improvement of the Leoni Group’s position in the Chinese market.
Read more Wire & Cable news here