Leifheit Aktiengesellschaft: Leifheit AG begins the financial year 2022 with a high level of turnover despite challenging market environment
/ Key word(s): Quarterly / Interim Statement
Leifheit AG begins the financial year 2022 with a high level of turnover despite
Nassau, 11 May 2022 – Leifheit AG (ISIN DE0006464506), one of the leading brand suppliers of household goods in Europe, generated Group turnover of EUR 71.8 million in the first three months of 2022 despite an increasingly challenging market environment. The figure, although 16.5% down on the exceptionally strong EUR 85.9 million recorded in the previous year, represents the second-highest quarterly turnover in the past 15 years on a like-for-like basis. Earnings before interest and taxes (EBIT) in the first quarter of 2022 amounted to EUR 2.7 million (previous year: EUR 8.3 million) and reflect the decline in turnover, the delayed impact of sales price increases and the significant rise in the price of raw materials and energy. Less taxes, this equalled a net result for the period of EUR 1.8 million in the first quarter of 2022 (previous year: EUR 5.8 million).
“Our performance in the first three months of 2022 shows that the systematic implementation of our Scaling up Success growth strategy continues to bear fruit despite the increasingly challenging market environment and is leading to a significantly higher level of turnover in the long term,” said Henner Rinsche, Chairman of the Board of Management of Leifheit AG. “For example, we again invested in consumer advertising for our Leifheit and Soehnle brands in the first quarter of 2022. The products advertised on TV made a disproportionately high contribution to turnover. At the same time, a number of extraordinary factors affected our business in both the current reporting period and the same quarter of the previous year. In the first three months of 2021, the COVID-19 pandemic brought about a change in consumer behaviour and an increase in the need for hygiene that had a positive effect on our business. However, concerns about inflation and rocketing energy prices, as well as the uncertainties caused by the Russia-Ukraine war, curbed the overall appetite for spending in spring 2022 and reduced demand for consumer goods.”
In the Household segment, the Leifheit Group’s turnover decreased by 14.5% to a total of EUR 59.5 million in the first quarter of 2022 (previous year: EUR 69.5 million). Accordingly, the share of Group turnover accounted for by this segment amounted to 82.8% in the reporting period, compared to 80.9% in the previous year. In the cleaning and laundry care categories, the Leifheit Group continued to benefit from TV advertising campaigns. However, turnover from these products also fell short of the exceptionally strong figures from the previous year due to the general reduction in private consumption.
The Leifheit Group recorded turnover of EUR 4.7 million (previous year: EUR 7.9 million) with the Wellbeing segment’s Soehnle brand, a drop of 40.2% compared to the first quarter of 2021. The share of Group turnover attributable to this segment declined accordingly to 6.6% (previous year: 9.2%). In the first quarter of 2021, the strong growth shown by Soehnle scales, which were advertised on TV for the first time, as well as greater demand for Soehnle air purifiers driven by the increased need for hygiene during the pandemic led to a considerable jump in turnover in this segment. These effects were no longer present in the first quarter of 2022. Instead, a more difficult overall environment and supply bottlenecks have had a negative impact on business since the second half of 2021.
In the Private Label segment, which mainly comprises sales of private-label brands by the French subsidiaries Birambeau and Herby, turnover fell by 10.2% to EUR 7.6 million in the first quarter of 2022 (previous year: EUR 8.5 million). The drop in turnover is mainly attributable to lower demand in the segment’s core market of France.
“We expect the difficult market conditions to continue in the current year,” said Henner Rinsche in regard to the implementation of the growth strategy in the current financial year. “Nevertheless, we will press ahead with our strategic initiatives. Our Regulus Aqua PowerVac cordless vacuum wiper finished top in a product comparison by the consumer portal IMTEST. In mid-2022, we will accompany the market launch of our new CleanTenso Power with intensive marketing activities. This enhanced steam cleaner removes 99.99% of viruses and bacteria without any chemicals1.”
The Leifheit Group is facing significant increases in the price of material, freight and energy as well as ongoing bottlenecks on procurement markets. At the same time, consumers are noticeably cutting back on spending in the Group’s core markets in response to the Russia-Ukraine war and rising inflation. In light of this, the Board of Management of Leifheit AG continues to forecast a slight year-on-year decline in Group turnover for the financial year 2022 and expects earnings before interest and taxes (EBIT) to be significantly down on the previous year.
Further information can be found in the quarterly statement for the period ending 31 March 2022, available at www.leifheit-group.com.
1 Tested on modified vaccinia virus Ankara and on E.coli bacteria.
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