Leifheit AG: 1st half of 2011 shows continuing growth in turnover

Leifheit AG  / Key word(s): Half Year Results

11.08.2011 08:37

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- Turnover increased from EUR 107 million to EUR 111 million despite
consumer
reticence in Europe  
- Special effects lead to temporary decline in earnings 
- Forecast for financial year 2011 confirmed

Leifheit AG presents its report today on the first half of 2011. The Group
increased turnover significantly by 4%. However, a sharp rise in commodity
prices and - particularly - currency effects from hedging procurement in US
dollars led to a temporary decrease in earnings.

Group turnover increased

Leifheit grew its global turnover from EUR 107 million in the first half of
2010 to EUR 111 million, with domestic share rising from 45% to 46%. As a
manufacturer concentrating exclusively on household products, Leifheit
divides its business into the segments 'Brand Business' (Leifheit, Dr.
Oetker Bakeware, and Soehnle) and 'Volume Business' (Birambeau, Herby and
Project Business).

Brand Business growing steadily

The Leifheit, Dr. Oetker Bakeware and Soehnle brands increased turnover by
around 3% to EUR 88 million (H1/2010: EUR 86 million). Growth in the Brand
Business is primarily from the German market, where turnover increased to
EUR 47 million (H1/2010: EUR 45 million). Foreign business continues to
reflect the different economic conditions. The biggest growth drivers in
Brand Business in the first half year were laundry care (7% growth in
turnover) and wellbeing (9%).

Volume Business continues on the growth track

Volume Business increased turnover to EUR 23 million (H1/2010: EUR 21
million), an increase of over 10%. This was primarily due to sales
promotion campaigns for laundry care products, which generated high growth
rates. Growth of mid-price kitchen products also made a significant
contribution here.

Currency effects and raw materials prices depress consolidated earnings

Group EBIT totalled EUR 3.4 million (H1/2010: EUR 7.7 million). The
decrease in earnings, in contrast to the significant growth in turnover, is
due to a number of special effects. These include unrealised currency
losses of EUR 0.5 million from the measurement of foreign exchange forward
contracts for the second half of 2011, which will be settled at year-end
2011. Foreign exchange forward contracts are used to hedge risks from the
procurement in US dollars. In the previous year this effect had a positive
impact on EBIT of EUR 2.1 million. In addition, there were other realised
foreign currency losses from settled foreign exchange forward contracts and
from the measurement of foreign currency positions in the balance sheet of
EUR 1.1 million. This contrasts with other foreign currency gains of EUR
1.0 million in the previous year. Operating EBIT adjusted for foreign
currency gains and losses increased to EUR 5.0 million (H1/2010: EUR 4.6
million).

Despite significantly higher commodity prices (particularly for plastics),
adjustments to the product range made it possible to maintain the gross
margin at the previous year's level of 43.0% (H1/2010: 42.9%). However,
this was offset by higher distribution costs, due to volume effects and
expanded marketing activities.

EBT for the period ending 30 June 2011 was EUR 2.5 million (H1/2010: EUR
6.6 million), with net results for the period of EUR 1.7 million (H1/2010:
EUR 5.5 million). The previous year's income statement also included net
results for the period of EUR 10.1 million from the former Bathroom
Furnishings division, which brought earnings for the first half of 2010 to
EUR 15.6 million.

Outlook for 2011: growth in turnover and earnings

Leifheit had a good first half of 2011 in terms of turnover, showing that
the initiated growth strategy is bearing fruit. The new brand and marketing
strategies will help leverage potential, particularly in the Brand
Business. There will be visible effects in 2012, chiefly in the
international sector.

By year-end Leifheit expects turnover to lie 3-5 % above the 2010 level.
However, sharp rises in commodity prices and negative currency effects
could significantly reduce the resulting growth in earnings. This is being
countered by price adjustments for numerous products in the second half of
2011. Assuming a moderate increase in raw material prices, management
accordingly still believes it will be able to report further growth in
earnings over 2010, adjusted for currency effects.

Additional information is available in the interim report for the period
ending 30 June 2011, and at
http://www.leifheit.de/en/investor-relations/publications/financial-report
s.html.


Contact:
Leifheit AG
D-56377 Nassau
ir@leifheit.com
+49 2604 977218




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Language:     English
Company:      Leifheit AG
              Leifheitstraße
              56377 Nassau
              Germany
Phone:        02604 977-0
Fax:          02604 977-340
E-mail:       ir@leifheit.com
Internet:     www.leifheit.com
ISIN:         DE0006464506
WKN:          646450
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart
 
End of Announcement                             DGAP News-Service
 
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