Leifheit Aktiengesellschaft: Leifheit AG publishes figures for the first nine months of 2022

Leifheit AG publishes figures for the first nine months of 2022

• At EUR 193.2 million, Group turnover in the first nine months of 2022 down by 14.2 % on previous year’s strong showing
• Group EBIT stands at EUR 3.2 million following drastic rise in material and energy prices
• Overall conditions much more challenging: inflation, high energy costs and war push consumer sentiment down to a record low
• Forecast for 2022 as a whole: marked decline in turnover in the low double-digit percentage range, EBIT in the low single-digit million range and positive free cash flow below the previous year’s figure

Nassau, 8 November 2022 – Leifheit AG (ISIN DE0006464506), one of the leading brand suppliers of household goods in Europe, generated Group turnover of EUR 193.2 million in the first nine months of 2022 in a market environment that remained difficult and was shaped, in particular, by a further deterioration in consumer sentiment in key European target markets. While significantly lower than the strong showing of EUR 225.3 million in the previous year, Group turnover remains much higher than the level seen in the financial years prior to the coronavirus pandemic. Earnings before interest and taxes (EBIT) amounted to EUR 3.2 million in the first nine months of 2022 (previous year: EUR 16.6 million). This was mainly due to the lack of contribution margins from the decline in turnover as well as the drastic rise in material and energy prices. The foreign currency result increased by EUR 3.2 million to stand at EUR 3.8 million. Less taxes, this equalled a net result for the period of EUR 2.2 million in the first nine months of 2022 (previous year: EUR 11.5 million).

Henner Rinsche, Chairman of the Board of Management of Leifheit AG, says: “Our results for the third quarter of 2022 reflect the cost of raw materials, which has been extremely high since 2021, and the rise in energy prices, which has led to a sharp hike in manufacturing costs. Furthermore, the high inflationary pressure and uncertainty resulting from the Russia-Ukraine war are having a lasting negative impact on general consumer appetite. Consumer sentiment in Germany has reached a new all-time low – a situation that is weighing on demand in the non-food sector in particular, which is relevant for the Leifheit Group. We will continue to manage this variety of challenges to the best of our abilities for the Leifheit Group.”

In the Household segment, the Leifheit Group recorded a decline in turnover of 12.7% in the first nine months of 2022 to a total of EUR 158.9 million (previous year: EUR 182.0 million). Accordingly, the share of Group turnover accounted for by this segment amounted to 82.2% in the reporting period, compared to 80.8% in the previous year. Turnover in the kitchen goods category in particular was considerably below the same period of 2021. Having spent more time cooking and baking at home at the beginning of financial year 2021 as a result of pandemic-related restrictions and restaurant closures, many consumers have now changed their behaviour once again.

Turnover generated by the Wellbeing segment, with the Soehnle brand, decreased by 40.7% year on year to EUR 11.7 million (previous year: EUR 19.8 million), resulting in a share of Group turnover of 6.1% (previous year: 8.8%). In the first nine months of 2021, the strong growth shown by Soehnle scales, which were advertised on TV for the first time, led to a considerable jump in turnover in this segment, as did the greater demand for Soehnle air purifiers driven by the increased need for hygiene during the pandemic.

In the Private Label segment, which mainly comprises sales of private-label brands by the French subsidiaries Birambeau and Herby, turnover fell by 3.8% to EUR 22.6 million in the first nine months of 2022 (previous year: EUR 23.5 million). The share of Group turnover attributable to this segment rose accordingly to 11.7% (previous year: 10.4%). Even though the turnover figures for the first nine months fell somewhat short of those seen in the previous year, demand for the private-label brands’ products in France – the segment’s core market – was positive in the third quarter of 2022.

“In light of the ongoing bottlenecks in procurement markets, we continue working proactively to safeguard our ability to deliver through forward-looking security and inventory management, as well as flexible production management,” Rinsche says in regard to the further implementation of the growth strategy in the current financial year. “At the same time, we are implementing measures to improve efficiency as well as the margin and cost situation. Our range will continue to cater to the trend towards more sustainable, energy-saving product alternatives. Many of our products are energy-saving and durable, making them sustainable by their very nature. Our ‘Electricity Savers’ campaign encourages consumers to switch to power-free laundry drying, because this brings several benefits. Switching from electronic dryers to drying racks like the Leifheit Pegasus and rotary dryers like the Leifheit Linomatic not only saves electricity and money, but also reduces CO₂ emissions by around 150 kg compared to an electric dryer.”

In light of extremely high material, freight and energy costs – along with a marked deterioration in the economic environment and consumer behaviour that reflects inflation concerns and cautious spending – the Leifheit Group believes that it will continue to face significant obstacles in the final quarter. Against this backdrop, the Board of Management of Leifheit AG expects a sharp, probably low double-digit percentage decrease in turnover for financial year 2022 compared to the previous year’s strong figure (2021: EUR 288.3 million), as well as earnings before interest and taxes (EBIT) in the low single-digit million range and positive free cash flow below the previous year’s figure. In July of this year, the Group was already anticipating a strong decrease in turnover, albeit one in a still single-digit percentage range.

Further information can be found in the quarterly statement for the period ending 30 September 2022, available at financial-reports.leifheit-group.com.

About Leifheit

Leifheit AG, founded in 1959, is one of the leading European brand suppliers of household items. The Leifheit Group divides its operating business into the Household, Wellbeing and Private Label segments. Leifheit and Soehnle products – two of Germany’s best-known household brands – are known for high quality and great utility for consumers. Its French subsidiaries Birambeau and Herby are active in the service-oriented Private Label segment with a selected product range. In each segment, the company focuses on its core product categories of cleaning, laundry care, kitchen goods and wellbeing. The Leifheit Group employs some 1,100 people. More information on Leifheit is available online at www.leifheit-group.com, www.leifheit.de and www.soehnle.de.