Leifheit AG: Leifheit result holds despite slight decline in turnover

Leifheit result holds despite slight decline in turnover

- EBIT for the first quarter of 2013 at previous year's level of EUR 2.8 million

- Weather causes decline in turnover of 4.2% to EUR 55.6 million*

- Significant catch-up effects in April

- Overall forecast for 2013 confirmed

Nassau, 14 May 2013 - The Leifheit Group, one of the leading European brand suppliers of household items, achieved a stable result in the first quarter of 2013 despite a decline in turnover of 4.2%. Despite the difficult economic environment in some southern European markets - especially Greece, Italy and Spain - as well as the long winter affecting turnover and earnings development in the first quarter of 2013, the management is sticking with its forecast for the year as a whole.

Georg Thaller, Chairman of the Board of Management of Leifheit AG: 'If the framework conditions for our business and the influences on our main sales markets do not change significantly, we expect a turnover growth at Group level of 2 to 4% for 2013 and an EBIT at the previous year's level. In the medium term we will continue to pursue our target for a sustainable and profitable turnover growth of between 3 and 5% with a strong earnings upturn. With cash amounting to EUR 38.1 million and an equity ratio of 45.5%, we are currently well-placed to secure these long-term growth and earnings targets'.

First quarter affected by adverse weather conditions

The unusually long winter in many European countries resulted in a significantly lower frequency in visits to shops. This culminated particularly in the reluctance of consumers to purchase rotary dryers for outdoor use as well as spring cleaning equipment. These effects are reflected in the first quarter's figures: Group turnover reached EUR 55.6 million - a decrease of 4.2%. However, primarily due to positive currency effects, Group earnings before interest and taxes (EBIT) in the first three months of 2013 remained at the previous year's good level of EUR 2.8 million. In accordance with the business strategy and with a view to strict cost discipline Leifheit has improved EBIT in the Brand Business segment from EUR 2.3 million to EUR 2.5 million. In the Volume Business the company recorded a slight fall in EBIT from EUR 0.5 million to EUR 0.3 million.

The EBIT margin increased by 0.2 percentage points on the same period of the previous year, from 4.7% to 4.9%. Earnings before taxes (EBT) developed positively at Group level: with an increase of 3.0% it reached EUR 2.4 million in the first quarter. The tax rate rose only slightly, from 23.1% to 24.0%. At EUR 1.8 million, the net result for the period was at the previous year's level.

Expectation of positive effects on turnover for 2013 as a whole

Leifheit is forecasting significant catch-up effects for the second quarter, which has already been observed in April and thus can largely compensate for the lack of turnover in the first quarter. A range of new products that Leifheit is due to launch in the middle of the year also promises significant turnover momentum.

For the year as a whole Leifheit expects positive effects from the further implementation of the 'Leifheit GO!' strategy. During the year, two initiatives will be promoted: under the POS excellence concept we will further optimise our brand presence in retail. Here Leifheit offers to retailers intelligent solutions, by which the increasing brand and quality orientation of consumers are taken into account. To this end, the high-quality products of the Leifheit and Soehnle brands are presented with eye-catching POS tools, expressive packaging and intelligent search logic on the shelf.

Furthermore Leifheit is expanding its activities in e-commerce. To best support this distribution channel, Leifheit has already implemented organisational measures and process optimisation in the context of a broad-based e-commerce project.

The aim of the Leifheit POS excellence initiative and of the e-commerce activities is to generate further growth in core European markets. In addition, Leifheit is focusing on the further expansion of distribution on its new growth markets. The focus is on Eastern Europe, selected regions in Asia and in Turkey.

For more information see the quarterly financial report as at 31 March 2013 and
www.leifheit.de/en/investor-relations/publications/financial-reports.html

*On 31 December 2012 Leifheit ended the license for the use of the naming rights to the brand Dr Oetker Bakeware. Turnover of Dr Oetker Bakeware amounted to EUR 1.4 million in the first quarter of 2012. In the first three months of the current financial year as part of the final completion sales totalling EUR 0.8 million were made. For better comparability, turnover has been adjusted for the business with Dr Oetker Bakeware for the current year as well as the previous year's figures.

About Leifheit

Founded in 1959, Leifheit AG is one of the leading European brand suppliers of household items. The company stands for high-quality, innovative products with great utility and pioneering design in the sectors of cleaning, laundry care, kitchen goods and wellbeing. Leifheit and Soehnle are among the best known brands in Germany. Other than in the Brand Business, Leifheit AG operates in the service-oriented Volume Business via its French subsidiaries Birambeau and Herby. Taking into account its international branches, the Leifheit Group has around 1,000 employees in total.