Leifheit Aktiengesellschaft: Leifheit AG sees substantial turnover and earnings growth in H1 2020

Leifheit AG sees substantial turnover and earnings growth in H1 2020

• Group EBIT rises sharply to EUR 8.8 million
• Group turnover up significantly to EUR 130.4 million
• Scaling up Success growth strategy bears fruit
• Advertising campaign to resume in second half-year
• Positive full-year outlook for 2020

Nassau, 13 August 2020 - Leifheit AG, one of the leading brand suppliers of household items in Europe, recorded extremely positive turnover and earnings development in the first half of 2020. According to the final figures, the Leifheit Group generated EBIT of EUR 8.8 million in the first six months of financial year 2020, increasing its earnings by a significant year-on-year margin of 75.7% (previous year: EUR 5.0 million). The positive earnings growth over the first half of the year was primarily due to the systematic implementation of the Scaling Up Success growth strategy. The substantial, 7.3% year-on-year rise in Group turnover to EUR 130.4 million contributed to the success of the company in the first half of the year. At the same time, the Leifheit Group improved the gross margin from 42.8% to 44.1%, which, combined with strict cost management, led to disproportionately high growth in earnings. Less taxes, the net result for the period stood at EUR 6.0 million in the first half of 2020 (previous year: EUR 3.0 million), with earnings per share of EUR 0.63 (previous year: EUR 0.32).

Henner Rinsche, Chairman of the Board of Management of Leifheit AG: "The consistent implementation of our growth strategy is paying off. We plan to steer Leifheit onto a lasting path to success by investing more in consumer advertising, further reducing costs within the Group and focusing on a higher-margin product mix. Following the successful TV campaign at the start of the year, the lockdown in March and April negatively impacted our business for a brief period of time due to the closure of key sales channels. After the reopening, we recorded a major rise in sales figures once again in May and June."

In its domestic market of Germany, the Leifheit Group generated turnover of EUR 53.6 million in the first half of the year (previous year: EUR 54.3 million). The slight decline in turnover is largely attributable to the closure of key sales channels during the coronavirus lockdown, which led to double-digit turnover losses in Germany in March and April. In regional terms, the company achieved significant growth in turnover, particularly in the Central European markets and in some target markets in Eastern Europe, as well as in the US. In the first half of the year, foreign turnover increased by a substantial EUR 9.6 million to stand at EUR 76.8 million (previous year: EUR 67.2 million). In Central Europe, turnover totalled EUR 55.3 million in the first six months of 2020 (previous year: EUR 47.6 million), rising by a remarkable 16.0%. The Leifheit Group succeeded in further expanding its distribution in Switzerland and the Netherlands in particular. The Group was also able to post gains in Eastern Europe, with turnover rising 7.5% to EUR 16.5 million (previous year: EUR 15.3 million). In Romania and Poland in particular, TV advertising led to an increase in turnover of 47.9% and 31.9% respectively. Outside Europe, the first half of 2020 also saw positive development, with turnover of EUR 5.0 million (previous year: EUR 4.3 million). Growth was driven in particular by the very good performance in the US, where the Group recorded an increase in turnover of 84.0%.

In the Household segment, which markets Leifheit-brand products and generates the strongest turnover, the Leifheit Group recorded significant turnover growth of 7.9% in the first six months of 2020. Turnover stood at EUR 105.8 million following EUR 98.0 million in the same period in the previous year, largely due to the TV campaign launched at the beginning of the year. In the cleaning product category, Leifheit generated turnover growth of 11.5% due to increased marketing activities and the population's greater need for hygiene in the wake of the COVID-19 pandemic. At the same time, the kitchen goods and laundry care categories also posted growth of 13.6% and 3.8% respectively.

In the significantly smaller Wellbeing segment, which features the Soehnle brand, the Group generated significant turnover growth of 21.7% to EUR 11.4 million (previous year: EUR 9.4 million). Specifically, the category Soehnle Medical and the Soehnle air purifiers - which remove allergens from the air and combat viruses and bacteria, resulting in increased demand from customers during the pandemic - also contributed to this positive development.

The Private Label segment, which primarily distributes private-label brands through the French subsidiaries Birambeau and Herby, continued posting declines in the period under review. Turnover fell by 6.6% to EUR 13.2 (previous year: EUR 14.1 million), mainly due to the imposition of severe retail trading restrictions during the coronavirus lockdown in France that were considerably stricter than in other sales markets.

CEO Henner Rinsche is optimistic with regard to the second half of the year: "We have big plans ahead of us in the months to come. Our top priority is continuing the advertising campaign that we launched at the start of the year. Further TV campaigns will be geared towards focusing consumers' attention on the CLEAN TWIST Ergo floor mop set and the Pegasus drying rack, which was awarded the test rating 'very good' by Haus & Garten Test. In addition, the largest print campaign to date for the Soehnle brand will kick off end of August under the slogan 'Auf's Gramm genau lecker' ('delicious to the gram'). The focal point of the campaign is the 'very good' test rating for the Soehnle Page Profi 300 kitchen scale, with advertisements featuring in high-circulation glossy publications. A large part of the marketing investment planned for 2020 will be made in the third quarter."

In the course of preparing the half-year financial statements, the Board of Management updated its forecast for financial year 2020 on the basis of preliminary figures for the first half of the year, with the Board of Management now assuming Group turnover growth of 7% to 9% and a Group EBIT of between EUR 12 million and EUR 15 million. Overall, the forecast is based on the assumption that there will be no further significant restrictions caused by the COVID-19 pandemic in the markets and sales channels relevant to the Leifheit Group.

Additional information can be found in the report for the first half-year of 2020, which is 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 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.