Leifheit AG: Growth boost for Leifheit in the second quarter

Growth boost for Leifheit in the second quarter

• Turnover rises 8.2% in Q2
• Stable EBIT of EUR 5.0 million in the first half-year
• Overall forecast for 2013 confirmed

Nassau, 13 August 2013 - The Leifheit Group, one of the leading European brand suppliers of household items, has more than offset the fall in turnover caused by the cold weather in the first three months with a strong turnover growth of 8.2% in the second quarter of 2013.

Stable development at previous year's level

In total, adjusted for discontinued operations with Dr Oetker Bakeware, the Group generated a turnover of EUR 108.8 million in the first half of 2013 (H1 2012: EUR 107.9 million); a plus of around 1%.

Operating earnings (EBIT) at EUR 5.0 million were close to the previous year's level of EUR 5.1 million. The slight decline was mainly due to clearance sales of obsolete stock of the Dr Oetker Bakeware brand. In addition, earnings were hit by negative one-off effects arising from provisions for severance payments totalling EUR 1.2 million. However, these were largely offset by positive effects from the valuation of foreign exchange forward transactions.

The result in the Brand Business segment amounted to EUR 4.1 million (H1 2012: EUR 4.0 million), while the EBIT in the Volume Business amounted to EUR 0.9 million (H1 2012: EUR 1.1 million). The tax rate increased from 18.6% to 22.6%. The net result for the period reached EUR 3.3 million, slightly below the previous year's level of EUR 3.5 million.

'Despite the difficult start in the spring, we recorded a slight increase in turnover in the first half-year. Firstly, in the second quarter consumers caught up on the purchases that they had put off in the first three months due to the lengthy cold spell. Secondly, we have been able to launch clever product innovations such as our new window vacuum cleaner very successfully. With an equity of EUR 89.2 million, an equity ratio of more than 45% and a strong free cash flow of EUR 9.8 million, we remain well positioned for future challenges', says Leifheit Chairman Dr Claus-O. Zacharias.

Brand Business grows strongly in Eastern Europe

In the past six months, Leifheit generated around 80% of the Group turnover - EUR 88.7 million - in the Brand Business with the Leifheit and Soehnle brands (H1 2012: EUR 87.4 million). Especially in Eastern Europe, the most important strategic growth area for Leifheit, turnover increased in the first half-year by a further 8.0% to EUR 8.8 million (H1 2012: EUR 8.2 million).

There was also a positive development in the domestic market Germany, with turnover up 3.0% to EUR 46.4 million (H1 2012: EUR 45.0 million) and overseas with a turnover increase of 3.6% to EUR 3.8 million (H1 2012: EUR 3.7 million). The Far East region in particular grew strongly, rising by 7.2%.

In the first half-year, with EUR 20.1 million (H1 2012: EUR 20.5 million), the expected weaker Volume Business contributed 18.5% of the overall turnover (H1 2012: 18.9%). While in this business area in Central Europe - especially France - Leifheit booked a strong increase in turnover of 7.2% to EUR 15.8 million (H1 2012: EUR 14.7 million), the Volume Business fell both in Germany with a turnover of EUR 2.6 million (H1 2012: EUR 3.3 million) and in the USA with EUR 1.8 million (H1 2012: EUR 2.5 million).

Forecast for 2013 confirmed

Despite the continuing difficult market situation, particularly in Southern Europe and the Netherlands, Leifheit is optimistic about the coming months, given the significant increase in sales in the second quarter, and has confirmed its forecast. Accordingly, for 2013 as a whole on a Group level, the company expects to achieve a turnover growth of 2 to 4% and an EBIT at the previous year's level. 'On the basis of current analyst estimates, we are assuming an end of year dollar exchange rate below the level of the end of June 2013, so that positive effects from the valuation of foreign exchange forward transactions will more than compensate the non-recurring expenses for severance payments for the year as a whole' says Dr Zacharias.

In the medium term, Leifheit is targeting a turnover growth of 3 to 5% on a Group level and a strong earnings upturn. The goal is to achieve an EBIT margin of 8% by 2016. The further implementation of the 'Leifheit GO!' business strategy will contribute significantly here: the core of the strategy is firstly the optimisation of the Leifheit brand presence at the point of sale under the term POS excellence as well as the further expansion of the e-commerce sales channel. Leifheit is also focused on strengthening its innovative power and the further expansion of its sales network in its growth markets of Eastern Europe and Turkey.

For more information, see the financial report for the first half year ending 30 June 2013 and the company's website at: http://www.leifheit.de/en/investor-relations/publications/financial-reports.html.
 

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.