Leifheit Aktiengesellschaft: Leifheit sees slight turnover growth

Leifheit sees slight turnover growth

• EBIT on par with previous year
• Brand Business turns in stable performance
• Volume Business increases
• Forecast for 2018 slightly adjusted

Nassau, Germany, 14 August 2018 - The Leifheit Group closed out the first half of 2018 with slight growth in turnover. The Group offset the turnover shortfall from the first three months of 2018 in the second quarter and generated 0.5% growth in turnover to mEUR 121.5. This growth was due in particular to solid performance in the domestic market of Germany. At mEUR 6.8, the company generated earnings before interest and taxes (EBIT) in the first six months of 2018 that were exactly on par with the previous year.

In the first six months of 2018, the Leifheit Group continued to see substantial growth in Germany. Turnover rose by 2.1% to mEUR 56.7 (previous year: mEUR 55.6), which accounts for a share of total turnover of 46.7% (previous year: 46.0%). The growth was driven equally by Brand Business and Volume Business.

In contrast, turnover in foreign markets decreased by 0.9% to mEUR 64.8. Prompting this development in particular was the drop in turnover outside of Europe owing to the strategic focus on the Central and Eastern European markets. Turnover in Eastern Europe also declined due to significant brand building measures in the previous year. Similar programmes have been planned for the later quarters of this financial year. The sales and distribution region of Central Europe remained largely stable.

In the first half of 2018, the Group generated turnover growth in Brand Business comprising the brands Leifheit and Soehnle of 0.2% to mEUR 103.4 (previous year: mEUR 103.1). Growth was solid in the Leifheit brand's cleaning and laundry care product categories. Products for floor cleaning and drying made a substantial contribution to this development, whereas sales of electrical appliances for surface cleaning fell short of expectations. Product innovations from the Soehnle brand for fitness, health and air treatment contributed significantly to the growth in the brand's turnover.

Volume Business, which is much smaller and managed with a clear focus on profitability, generated an increase in turnover in the first six months of 2018 of 1.9% to mEUR 18.1 (previous year: mEUR 17.7). Kitchen products from Birambeau and a boost in promotional business were the factors driving growth in Volume Business. As a result, they more than offset falling turnover from laundry care products and in Project Business.

For the first half of 2018, the Leifheit Group reported EBIT on par with the previous year of mEUR 6.8 (previous year: mEUR 6.8). After a decrease in earnings in the first quarter, EBIT in the second quarter of 2018 rose by 26% to mEUR 2.1 (previous year: mEUR 1.6). Lower non-recurring expenses, a decline in administrative costs and a significant improvement in the foreign currency result helped stabilise EBIT. In the first half of the year, the net result for the period likewise reached the level from the previous year of mEUR 4.4.

"After seeing declining turnover in the first three months due partly to weather conditions, we succeeded in generating growth again in the second quarter, even if it was lower than we imagined. At the same time, we continued to expand our market position in Germany and saw further gains both in Brand Business and Volume Business. However, we currently evolve further new strategies for sustained improvement of growth and profitability. At the same time we are pressing ahead with strategic measures to better seize the opportunities of digitalisation and to pick up the pace for the development of new products in order to continue strengthening the ranges of our brands. In addition, programmes for enhancing the efficiency and effectiveness of sales and distribution and of the entire value chain have been initiated. We will also be stepping up our efforts to expand geographically in the Asian markets in future. Through these measures, we aim to swiftly return to broader sustainable growth," says Thomas Radke, Chairman of the Board of Management of Leifheit AG.

Forecast adjusted slightly

The Leifheit Group has detailed its forecast for the remainder of financial year 2018. The weak demand in the market for electrical surface cleaning appliances may have a more lasting impact than initially assumed. However, the Group expects to see appreciable growth above all due to the launch of new products in Brand Business. For financial year 2018, the Leifheit Group anticipates turnover growth of 2.5% to 3.5%, compared to most recently expected growth slightly below of 4% to 5%. The company expects growth of 3% to 4% in Brand Business, while it believes there will be no change in turnover in Volume Business, which is slated to be on par with 2017. The Leifheit Group now forecasts earnings before interest and taxes for financial year 2018 of approximately mEUR 16 to mEUR 17. So far, it had expected to achieve EBIT at the lower end of mEUR 17 to mEUR 18.

Additional information can be found in the financial report for the first half-year ending 30 June 2018, 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 1,100 employees. More information on Leifheit is available online at www.leifheit-group.com, www.leifheit.de, www.soehnle.de.