Leifheit Aktiengesellschaft:

Leifheit remains on course for growth

Nassau, Germany, 10 November 2016 − The Leifheit Group reported profitable growth for the first nine months of 2016 with turnover of EUR 179.5 million. This corresponds to a 3.6% increase over the figure for the same period in the previous year, which stood at EUR 173.2 million. The Leifheit brand and e-commerce development generated positive momentum for growth in Brand Business. The Group recorded a decline in Volume Business during the reporting period.

Group business outside of Germany once again posted strong growth with a 9.4% increase in turnover to EUR 105.1 million. The share of foreign business in turnover thus stood at 58.6%. The Central Europe region continued to account for the largest share in business outside of Germany, where turnover expanded considerably by 6.7% to EUR 80.3 million. In particular, the markets in Italy, Belgium and Scandinavia made the largest contributions in absolute terms. The Eastern Europe region recorded the largest rise in growth, increasing 35.6% to EUR 17.6 million. In particular, Poland, the Czech Republic and Slovakia were the drivers of this strong performance. Turnover in Germany stood at EUR 74.4 million, which equated to a 3.5% decline. This was due primarily to an important mail-order customer moving its delivery warehouse to Luxembourg, which meant that turnover shifted there as well.

"We succeeded in continuing the upward trend over the year to date and significantly increasing our turnover, especially in Central and Eastern Europe. The positive development in these markets and the continuous growth of our Brand Business prove that we are successfully implementing the 'Leifheit 2020' strategy, which is the basis of sustainable growth for our company," Thomas Radke, CEO of Leifheit AG, said.

EBIT affected by foreign currency result

The Leifheit Group's growth has had a positive impact on the result. Gross profit in the first nine months of 2016 rose by EUR 3.7 million to EUR 84.9 million. The contribution margins from higher turnover contributed to this rise. The gross margin increased from 46.9% to 47.3%. Earnings before interest and taxes (EBIT) for the Group stood at EUR 15.7 million after reaching EUR 17.9 million during the same period in the previous year. EBIT was considerably impacted by the foreign currency result, which fell by EUR 2.7 million year on year. The reason for this was the appreciation of the euro against the US dollar in the current financial year, which led to decreases in the fair value of concluded forward foreign exchange transactions as at the balance sheet date. In contrast, the result improved in operational terms. Adjusted for the foreign currency result, EBIT rose by 3.2% to EUR 16.9 million in a period comparison. The adjusted EBIT margin stood at 9.4%. Less taxes, the Leifheit Group generated a net result for the period of EUR 10.2 million after EUR 11.9 million during the same period in the previous year.

Brand Business grows in particular with the Leifheit brand and in e-commerce

The strategically important Brand Business is the larger of the Leifheit Group's two segments. It encompasses the business activities involving Leifheit and Soehnle branded products and is at the heart of the "Leifheit 2020" long-term growth strategy. The Group was able to continue expanding turnover in Brand Business to EUR 150.4 million in the first nine months of the current financial year. This corresponds to a 5.4% increase year on year. The share in Group turnover thus equated to 83.8% in the same period (previous year: 82.4%). Turnover for the e-commerce sales channel rose by 28.9% compared to the first three quarters of 2015. The continuous growth in Brand Business was driven by the product categories cleaning and laundry care. Turnover from Leifheit cleaning products in particular posted strong growth in the first three quarters. Segment EBIT stood at EUR 12.9 million compared to EUR 14.5 million in the same period of the previous year. Adjusted for the foreign currency result, EBIT was nearly on a par with the figure from 2015 at EUR 13.9 million.

Volume Business: turnover declines stronger than expected

Volume Business, which encompasses the subsidiaries Herby and Birambeau, as well as project business, is the smaller of the Leifheit Group's segments by a considerable margin, and is clearly geared towards profitability. Turnover in Volume Business declined year on year by 4.7% to EUR 29.1 million. Various factors were relevant to the development of turnover in the segment. A new trade partner in France has been selling Birambeau kitchen products since the third quarter of 2015. Equipping the customer in the initial stages led to disproportionately high growth rates in the second half of 2015 and in the first six months of 2016. In the third quarter of this year we did not record growth due to the absence of this initial equipment effect. The task of contract manufacturing for third parties at the end of 2015 and declines in project business also curbed turnover development in the Volume Business segment. This segment accounted for a total of 16.2% of Group turnover (previous year: 17.6%). EBIT in Volume Business totalled EUR 2.8 million (previous year: EUR 3.4 million). Adjusted for the foreign currency result, EBIT rose by EUR 2.3 million to EUR 3.0 million.

Turnover and earnings forecast put in concrete terms

Based on its business performance so far, Leifheit AG expects Group turnover growth to be at the lower end of the forecast corridor of 3% to 4% for the full financial year 2016. In Brand Business, which is at the heart of the "Leifheit 2020" growth strategy, the Group anticipates a strong increase in turnover of around 5% and therefore a growth at the upper end of the forecast. For the significantly smaller Volume Business Leifheit expects a decline in turnover of about 7%. Previously the company assumed a stable development in this segment. Leifheit AG put its earnings expectations in concrete terms: The Group expects earnings before interest and taxes (EBIT) to be at the lower end of the forecast corridor of EUR 21 million to EUR 22 million and anticipates that EBIT will not include a positive foreign currency result.

Further information can be found in the quarterly statement for the period ending
30 September 2016, which is available at http://financial-reports.leifheit-group.com.

About Leifheit

Leifheit AG, founded in 1959, is one of the leading European brand suppliers of household items. The company stands for high quality, innovative products with great utility and functional design in the sectors of cleaning, laundry care, kitchen goods and wellbeing. Leifheit and Soehnle are among the best-known brands in Germany. In addition to the Brand Business, Leifheit AG operates in the service-oriented Volume Business via its French subsidiaries Birambeau and Herby. The Leifheit Group and its international branches combined have around 1,000 employees. More information on Leifheit is available online at www.leifheit-group.com, www.leifheit.de, www.soehnle.de.