Leifheit Aktiengesellschaft: Leifheit aims for turnover growth of 4 to 5%

Leifheit aims for turnover growth of 4 to 5%

- Group turnover stable in financial year 2017

- Brand Business benefits from sustained growth of the Leifheit brand

- Special effects negatively affected EBIT

- Unchanged ordinary dividend of EUR 1.05 per share proposed

Nassau, Germany, 27 March 2018 - In financial year 2017, the Leifheit Group generated Group turnover of mEUR 236.8, which was approximately on par with its level in the prior year (2016 mEUR 237.1). Above all, the negative foreign currency result, higher material prices as well as planned expenses for the reorganisation of sales activities affected earnings before interest and taxes (EBIT). EBIT reached mEUR 18.8, which was below its level in the prior year (2016: mEUR 21.1). EBIT thereby remained in the forecast corridor. In the current financial year, Leifheit aims to increase Group turnover again, from about 4 to 5%.

"Last year our business performed less well than expected because we were unable to counteract all the unexpected challenges with short-term measures. However, we are generally on the right path with regard to the implementation of our 'Leifheit 2020' growth strategy. That is reflected, in particular, by the renewed positive development of the e-commerce distribution channel and the significant impetus for growth achieved by the introduction of new consumer-oriented products in the Brand Business," says Thomas Radke, Chairman of the Board of Management of Leifheit AG.

Brand Business benefits from the success of the Leifheit brand

Turnover in the Brand Business, which includes the activities of the Leifheit and Soehnle brands, increased slightly in the financial year, reaching mEUR 196.7 by the end of the year. That compared to a total of mEUR 195.8 in the prior year. The development of the segment was driven by the sustained growth of the Leifheit brand's cleaning and laundry care products. For example, the Leifheit LinoProtect rotary dryer with integrated waterproof cover introduced in 2017 and the Leifheit Care & Protect products for wood floor care each made a significant contribution, along with the Leifheit Click System, which has been established for a number of years. Turnover in the e-commerce distribution channel also increased strongly again, with growth of 10%. The Brand Business' total share of Group turnover rose further to 83.1% (2016: 82,6%).

The significantly smaller Volume Business, which is characterised by a high proportion of special offers and project business, and a strong focus on individual markets and customers, achieved turnover of mEUR 40.1 in financial year 2017. That represented a decrease of 2.8% after the mEUR 41.3 achieved in the prior year. The decrease was primarily the result of lower business volume in France. Here, volumes for kitchen products from Birambeau and laundry care products from Herby were lacking in various hyper markets. Meanwhile, turnover in the Volume Business in Germany increased significantly.

EBIT decreased year on year by mEUR 3.3 to mEUR 18.8. The EBIT margin in the reporting period was 8.0 percent, and was therefore lower than the margin of 9.3 percent achieved in the prior year. Adjusted for the foreign currency result, EBIT fell by mEUR 1.5 to mEUR 20.3. The adjusted EBIT margin of 8.6% was lower than its level of 9.2% in the prior year. After deduction of taxes, the Leifheit Group achieved a net result for the period of mEUR 12.9 (2016: mEUR 14.5).

Leifheit reported Group liquidity of mEUR 57.2 as at 31 December 2017. The mEUR 12.3 decrease in liquidity is primarily due to a mEUR 14.6 reduction in cash flow from operating activities and the increased dividend, including the special dividend for financial year 2016. Equity reached mEUR 98.5 as at 31 December 2017 and therefore fell by mEUR 6.1 year on year. As a result, the equity ratio stood at 43.8% as at the end of financial year 2017, having amounted to 43.7% as at the balance-sheet date in 2016.

"We have further sharpened our 'Leifheit 2020' strategy"

Based on business development, the Board of Management of Leifheit AG will propose an unchanged ordinary dividend of EUR 1.05 per share for the past year to the upcoming Annual General Meeting on 30 May. That dividend takes into the account the twofold increase in the quantity of shares compared to the prior year due to the issuing of bonus shares in June 2017.

"We have had a good start in the year 2018. In the current year we will again position ourselves in the market with innovative, consumer-oriented products. That is the key prerequisite for the achievement of sustainable growth. At the same time, we have further sharpened our 'Leifheit 2020' strategy in some respects, such as with regard to our focus on channels and assortments. Essentially, however, we intend to make better use of the opportunities of digitalisation in many areas," adds Thomas Radke.

EBIT of between mEUR 17 and mEUR 18 expected - implementation of important future-oriented projects in 2018

The Board of Management of Leifheit AG expects a return to the company's long-term growth trajectory in the current year. It forecasts a year-on-year increase in Group turnover of approximately 4 to 5%. In the Brand Business, turnover is expected to increase by about 5% to 6%. For the smaller and more volatile Volume Business, which is managed with a focus on profitability, in 2018 the Board of Management expects turnover at the level seen in 2017. EBIT of approximately between mEUR 17 and mEUR 18 is expected. The significant factors affecting the expected development of EBIT are, on the one hand, predicted increases in the prices of materials and negative currency effects on production costs. On the other hand, based on its analysis of the last financial year, the Board of Management has developed strategic medium-term projects that will make it possible to better exploit the opportunities for growth presented by digitalisation, and to expand the product categories while also sustainably increasing future profitability. The cost of the projects will only be partially offset by optimisation and savings.

Further information can be found in the Leifheit annual financial report 2017, which is 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 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 1,100 employees. More information on Leifheit is available online at www.leifheit-group.com, www.leifheit.de, www.soehnle.de.