Looking at the markets: Aurubis, Huber+Suhner, Leoni

We're ready to publish a new issue of the column "Looking at the markets", analysing the performances of three stock companies which are prominent in their field with current information on their business activities - a good way to get a feel of the industry!

This time we chose to concentrate on copper products and cables, taking into consideration following enterprises:

Aurubis, Germany: Copper, copper alloys and semifinished copper products
Huber+Suhner, Switzerland: Cables and systems for the electrical and optical transportation of data and energy
Leoni, Germany: Cables and cable systems

We invite you to read also the final part of the article called "Latest trends" which considers newly published market surveys and other studies concerning directly or indirectly the mentioned industries, that could constitute an additional source of valuable information.

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Aurubis Group

Aurubis Group, Hamburg/Germany (13/02/2017): The producer of copper and copper alloys and semifinished copper products with more than 6,400 employees generated operating earnings before taxes (EBT) of € 18 million in Q1 of fiscal year 2016/17 which began on October 1st (previous year: €36 million). The result was significantly influenced by measurement effects amounting to € 26 million and a legally mandated maintenance shutdown in Hamburg and the resulting decrease in concentrate throughput (total impact on the result: € 15 million). In contrast, the strong US dollar, improved revenues from copper scrap input due to higher throughputs, and a higher metal gain with increased metal prices influenced the operating result positively.
At a level of € 2,462 million, the Group’s revenues in the first three months of the fiscal year were similar to those of the prior year (€ 2,398 million). Higher metal prices stood in contrast to slightly lower sales volumes.
Projects
At the annual general meeting on March 2, 2017, a new company vision was presented: Until 2025 the company intends to enhance and expand its profile as a supplier of various non-ferrous metals. Aurubis wants to grow internally and externally and initiated a transformation program entitled “ONE Aurubis”. It includes a number of sub-projects that will focus on further development and adjustment of the strategy, the organizational structure, process improvements, staff development and the company culture and communication.
Outlook
Aurubis anticipates a good market situation overall in both the raw material and product markets. Because of the high copper prices at the moment, the company expects a good supply of copper scrap and, consequently, higher refining charges than the previous year.
Aurubis also anticipates a good demand level on the sales markets for copper products, though demand in North America is likely to stagnate. In the copper production sector, Aurubis expects the volume of copper concentrates processed to be higher than the previous year, with high plant availability.
Aurubis confirms the current earnings forecast for fiscal year 2016/17. Since much of the revenue is based on the US dollar, Aurubis also expects positive contributions to earnings due to the currency’s strength. “Based on today’s conditions, we would like to improve our EBITDA by the end of fiscal year 2019/20 with internal optimization measures generating more than € 200 million,” Executive Board Chairman Jürgen Schachler stated as a concrete target at the 2017 general meeting.
Company presentation/annual report
http://annualreport2015-16.aurubis.com/fileadmin/user_upload/PDF_EN/Aurubis-AR2015-16.pdf
Sources
https://www.aurubis.com/en/en/corp/public-relations/press-releases--news/news/2017/13.02.2017---aurubis-generates-result-of-%E2%82%AC-18-million-for-the-quarter-and-confirms-forecast-for-full-fiscal-year-2016-17
http://www.finanznachrichten.de/nachrichten-aktien/aurubis-ag.htm
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Huber+Suhner

Huber+Suhner AG, Herisau/Switzerland (14/03/2017): The manufacturer of cables, other components and systems for the electrical and optical transportation of data and energy with more than 4000 employees achieved in the financial year 2016 an increase of net sales by 4.4% to CHF 737.2 million. Order intake increased by 6.2 % to CHF 746.6 million compared to the previous year. EBIT grew by 24.4% to CHF 65.1 million, the EBIT margin rose from 7.4% to 8.8%. The net income of CHF 49.1 million almost doubled compared to the previous year (CHF 24.7 million). The development of the three business divisions was as follows:

Radio Frequency
Order intake increased by 12.5% to CHF 226.4 million with a 6.3 % increase in net sales to CHF 219.7 million. The EBIT margin reached 12.5 %, corresponding to an increase of two percentage points. This growth was primarily attributable to an increased market share in business with major communication equipment manufacturers, the expansion of market leadership in the field of board connectors and progress in the aerospace+defense market segment.
Fiber Optics
The division recorded an increase of order intake by 19.0% to CHF 322.3 million, net sales grew by 8.9% to CHF 305.7 million. The EBIT margin improved by 0.3 percentage points to 12.6 %. This success is attributable to increased market shares in business with the large-scale communication equipment manufacturers. Huber+Suhner Cube Optics, which was acquired in October 2014, also made a noticeable contribution to growth in net sales and profitability. The business generated by the introduction of the LTE mobile radio standard was able to maintain a high level in 2016 thanks to geographical diversification. The acquisition of Polatis, the technology leader in the field of ‘All-optical switches’, further boosted the position and the outlook in the data centers market segment.
Low Frequency
Order intake decreased to CHF 198.0 million (–14.2%), net sales fell by 3.3 % to CHF 211.8 million. The EBIT margin increased slightly from 1.1% to 1.8%. The cable system project for the SBB Twindexx trains caused unpredictable additional costs. The project is now back on track. Finally, the division made large-scale preliminary investments in the field of electromobility, a market which is promising good growth prospects for the medium term.
Projects
Over the next three years, Huber+Suhner will deliver complete connectivity solutions for 140 TGV trains of French railway company SNCF and thus support the world’s first broadband Wi-Fi on trains with speeds of up to 300 km/h.
To remain at the leading edge in the future, Huber+Suhner has invested an amount in the mid-single-digit million range at its existing “Mühle” site to bolster its expertise in injection moulding and has also renewed part of its machine pool. The infrastructure is designed to enable the mass production of complex parts that meet extremely strict tolerances. Through this, the company is focusing on the key markets of communication, industrial and transportation, with particular emphasis on the automotive industry. The move to the new location reduces the distances involved and brings further advantages. For example, raw materials are now supplied centrally for the cable and injection moulding areas in Herisau. Internal processes have been further optimized and the change provides employees with more direct access to central services and a stronger connection to existing offerings such as the staff canteen.

Outlook
The growth drivers continue to be the demand for broadband communications, the exponential growth of transported and stored data, the need of the growing urban population for environmentally friendly mobility (electromobility), and the sustained technology development and need for innovation in the high-tech niches. Although trends in the global economy are difficult to evaluate because of the political and macro-economic risks, Huber+Suhner expects to remain on a course of growth and to keep the EBIT margin at the previous year’s attractive level in 2017.

Company presentation/annual report
http://hubersuhner.com/Files/HuberSuhner.CorporateSite/b0/b0f2c870-4fac-43fb-a438-5bd7e7a8393f.pdf

Sources
http://www.finanzen.ch/nachrichten/aktien/Huber+Suhner-verdoppelt-2016-Reingewinn-1001831740
https://www.fuw.ch/schweizer-unternehmen/huber-suhner/
http://www.finanznachrichten.de/suche/uebersicht.htm?suche=huber+++suhner&redirect=true
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Leoni

Leoni AG, Nuremberg/Germany (23/03/2017): The manufacturer and provider of cables and cable systems to the automotive sector and other industries with about 79,000 employees worldwide, generated sales of €4.4 billion in the fiscal year 2016 (2015: €4.5 billion). Earnings before interest and taxes (EBIT) amounted to €78.1 million (2015: €151.3 million). This decline is mainly due to restructuring expenses of €31.4 million and losses due to a fraud case of approximately €40 million. On an adjusted basis, EBIT improved by about 12% to €160.2 million (2015: €143.6 million).
In 2016 the company’s both divisions – Wiring Systems Division (WSD) and Wire & Cable Solutions (WCS) – realised more than 3% organic growth in terms of earnings before interest and taxes (EBIT). 60% of the sales were contributed by WSD, the other 40% by WCS, or with view on the customer markets: 80% come from the automotive business, the remaining 20% from other branches.

WSD
One of the outstanding business actitivities was the acquisition of a 51% stake in the Chinese wiring systems manufacturer Wuhan Hengtong Automotive. This step strengthens Leoni's position on the Asian market as Leoni now also supplies Dongfeng Peugeot Citroën Automobile, China’s second largets car manufacturer. In mid-2017 the new Leoni new plant in Merida, Mexico, will start operation.

WCS
The division commissioned a PVC processing line in China and began its installation of an irradiation crosslinking line in India. Leoni acquired in February 2017 a two-thirds holding in Adaptricity AG, an ETH Zürich spin-off which will contribute software-supported consulting services based on expert electrotechnical knowledge to the group. Leoni will be able to deploy proprietary software that generates time series-based simulations, for example to optimise power distribution grids by applying SmartGrid technologies.

Projects
Leoni is now going to realise its ‘Factory of the Future’ project in the town of Roth near the company’s headquarters in Nuremberg and will be investing €90 million in the facility. The construction phase officially started on April 5, 2017. Besides additional production capacity the buildings will comprise a laboratory and development center for innovative products and an educational and advanced training facility. The focus of production will be on cables for the car industry, for example data cables for autonomous driving. The company expects to start step-by-step relocation of its ongoing production from the existing plant in Roth in early 2019. Relocation of the roughly 800 employees to the new factory is likely to be completed in mid-2020.

Outlook
In total Leoni expects for this year €4.6 billion sales – with a significant increase in the Asian markets, a weak increase in the EMEA countries and a decline in the US market – and an EBIT of €180 to €200 million. €250 million are forseeen for investments.

Company presentation/annual report
https://d3gx8i893xzz0e.cloudfront.net/fileadmin/corporate/
publications/reports/2016/annual_report_2016.pdf?1490257262

Sources
https://www.leoni.com/en/investor-relations/
http://www.handelsblatt.com/unternehmen/industrie/leoni-kabelhersteller-will-2017-wieder-wachsen/19559784.html
http://www.finanznachrichten.de/nachrichten-aktien/leoni-ag.htm
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Latest trends – Market Research Reports
Wire, cable and fiber optics


Wire and cable/copper and aluminium
Continuous reporting
https://www.crugroup.com/analysis/wire-and-cable/

Wire and cable data service
Continuous reporting
https://www.integer-research.com/market-analysis/wire-cable-data-service/
Global Magnet Wire Market Market Research Reports
Apr 2017
http://www.reportsnreports.com/reports/946557-global-magnet-wire-market-research-report-2017.html
Bare Copper Wire Market in Europe
Apr 2017
http://www.crossroadstoday.com/story/35203016/bare-copper-wire-market-in-europe-research-study-including-growth-factors-types-and-application-by-regions-from-2017-to-2021
World Copper Wire Rod Market
March 2017
https://www.wiseguyreports.com/reports/1037568-world-copper-wire-rod-market-by-product-type-market-players-and
Copper Enameled and Bare Wire Market in EMEA 2017-2021
March 2017
http://www.businesswire.com/news/home/20170331005288/en/Copper-Enameled-Bare-Wire-Market-EMEA-2017-2021
Global Enamelled Copper Wire Market
Febr 2017
https://www.linkedin.com/pulse/global-enamelled-copper-wire-market-research-report-forecast-kadu
2017 Fiber Optic Cable Market Report
Apr 2017
http://www.wdrb.com/story/35226108/2017-fiber-optic-cable-market-report-cost-price-revenue-gross-margin-global-market-by-volume-and-value-examined-a-new-research
Global Radio Frequency Cables Industry Market Research Report 2017
Apr 2017
http://prsync.com/qyresearch-market-research-report/global-radio-frequency-cables-industry-market-research-report--1582547/
Global Power Cables Market 2017-2021
March 2017
https://www.reportbuyer.com/product/3664222/global-power-cables-market-2017-2021.html
U.S. Fiber Cable Market 2017 - Analysis And Forecast to 2020 - Research and Markets
Febr 2017
http://www.businesswire.com/news/home/20170203005295/en/U.S.-Fiber-Cable-Market-2017---Analysis
Wire & Cable Market Research Reports & Industry Analysis
https://www.marketresearch.com/Technology-Media-c1599/Telecommunications-Wireless-c94/Wire-Cable-c995/
Previous issues of the column:
Looking at the markets: Bossard, Norma Group, SFS >>
Looking at the markets: Bekaert, Salzgitter, Voestalpine >>
The information has been compiled by Dipl.-Ing. Konrad Dengler, a technical journalist specialised in industrial activities.


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