Leifheit Aktiengesellschaft: Leifheit AG makes solid start to financial year 2020
/ Key word(s): Quarterly / Interim Statement
Leifheit AG makes solid start to financial year 2020
- Group turnover up 6.8% to EUR 68.7 million in the first quarter
- Group EBIT 9.4% higher than previous year at EUR 4.3 million
- TV advertising campaign begins well at the start of the year
Nassau, 13 May 2020 - Leifheit AG, one of the leading brand suppliers of household items in Europe, made a successful start to financial year 2020 and was able to generate both significant turnover and earnings growth in the first quarter of 2020. The Leifheit Group increased its turnover by 6.8% in the first three months of 2020 to EUR 68.7 million (previous year: EUR 64.3 million). The relative gross margin improved by 1.8 percentage points to 44.7%. Earnings before interest and taxes (EBIT) were also up on the previous year at EUR 4.3 million (9.4%) (previous year: EUR 3.9 million). Adjusted for the foreign currency result, EBIT stood at EUR 4.4 million (previous year: EUR 3.4 million), an increase of EUR 1.0 million. Less taxes, the Leifheit Group reported a net result for the first quarter of 2020 of EUR 2.9 million (previous year: EUR 2.5 million).
"The TV advertising campaign began well in Germany and led to a significant year-on-year rise in turnover of 10% in the first two months of 2020, prior to the restrictions imposed due to the coronavirus pandemic," said Henner Rinsche, Chairman of the Board of Management of Leifheit AG. "Demand for the advertised products, such as the Profi floor wiper system and the Linomatic rotary dryer, was particularly high among consumers. We also benefited from increased marketing activities in foreign markets. This trend offers confirmation that our strategy of increased investment in consumer advertising and a higher-margin product mix is the right one."
In its domestic market of Germany, Leifheit reported first-quarter turnover of EUR 28.7 million (previous year: EUR 28.8 million). Turnover growth in Central Europe, Eastern Europe and markets outside of Europe helped foreign turnover rise by EUR 4.5 million to EUR 40.0 million (previous year: EUR 35.5 million). The Group was able to make further major gains in Eastern Europe in the first three months of 2020, with turnover climbing by 13.7% year on year to EUR 9.6 million (previous year: EUR 8.5 million) in the first quarter. Turnover in Central Europe rose by 12.1% from EUR 25.2 million to EUR 28.2 million, in particular as a result of strong growth in the Netherlands. Leifheit reported turnover of EUR 2.2 million in markets outside of Europe (previous year: EUR 1.8 million), a rise of 14.0%.
In the Household segment, in which Leifheit brand products are sold and the highest turnover is generated, the Group increased turnover by 9.3% to EUR 56.9 million (previous year: EUR 52.1 million). The cleaning product category was the standout performer in this segment, achieving double-digit growth. The TV campaigns in Germany and selected European markets caused consumer demand to pick up at the start of the year. The Leifheit Profi wiper systems contributed particularly to this growth. The laundry care category developed positively, benefiting from successful promotional business and increased TV advertising. With hygiene and cleanliness absolutely paramount during the coronavirus pandemic, Leifheit donated 2,000 Profi floor wiper systems to 1,000 retirement homes in Germany, which are exposed to a high risk of infection.
In the Wellbeing segment, which is significantly smaller than the Household segment, the Group was able to generate turnover growth of 18.0% from EUR 5.2 million to EUR 6.2 million with the Soehnle brand. Successful promotions in the Soehnle Medical product category and strong demand for air treatment products played a major role in this development.
The Private Label segment, which mainly comprises sales of private-label brands by the French subsidiaries Birambeau and Herby, continued to decline in the first quarter of 2020. Turnover fell from EUR 7.0 million to EUR 5.6 million year on year in the wake of the coronavirus pandemic and the widespread restrictions imposed on the French retail industry.
Group liquidity declined by EUR 11.3 million to EUR 39.0 million in the first three months of 2020. Cash flow from operating activities stood at EUR -9.6 million (previous year: cash inflow of EUR 0.1 million), primarily due to the turnover-related rise in receivables and the decline in liabilities, inventories and other current receivables.
The COVID-19 pandemic has had a noticeable effect on Leifheit's business since mid-March and will continue to affect the development of the Group, particularly in the second quarter. However, the overall effect on financial year 2020 will depend on the duration of the coronavirus-related restrictions and the economic consequences of the crisis.
"The coronavirus pandemic has resulted in the loss of important distribution channels," said CEO Henner Rinsche. "On the one hand, stationary retailers were completely closed in many sales markets. On the other hand, online retailers have focused on essential everyday goods. We expect this trend to be gradually reversed and anticipate that sales figures will gradually rise again from May onwards due to a renewed increase in demand from leading online retailers and the reopening of stationary retail. That being said, the market environment remains challenging due to the extraordinary economic situation. Due to the high degree of uncertainty, we are still unable to estimate the impact of the coronavirus pandemic on the Leifheit Group's business development in the current financial year. We intend to emerge stronger from the crisis and double down on our strategic initiatives. We are planning TV campaigns and joint promotions with retailers in the second half of the year. In addition, we will continue to work towards cutting costs within the Group and improving the product ranges."
Leifheit AG will hold a virtual Annual General Meeting on 30 September 2020 in accordance with the regulations of the C19 AuswBekG. The invitation to the AGM will be published in the Federal Gazette in due course and sent to all shareholders.
Further information can be found in the quarterly statement for the period ending 31 March 2020, available at http://financial-reports.leifheit-group.com.
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.
13.05.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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