Leifheit Aktiengesellschaft: Leifheit starts 2015 in dynamic fashion and lifts its profit forecast
Leifheit Aktiengesellschaft / Key word(s): Quarter Results/Change in Forecast
Leifheit starts 2015 in dynamic fashion and lifts its profit forecast
Nassau, 12 May 2015 - The Leifheit Group has achieved turnover of EUR 58.1 million during the first quarter of the 2015 financial year. Compared to the previous year, this corresponds to an increase of 3.9%. As expected, the growth was achieved entirely within the Brand Business segment. However, only a comparatively low fall in turnover was recorded within Volume Business, which meant that a positive trend was also seen in this segment.
"The start to the current financial year was promising. During the initial quarter of our new 'Leifheit 2020' group strategy, we immediately achieved a considerable increase of turnover within Brand Business, which was supported by our top sellers as well as newly introduced products. At the same time, we also succeeded in slowing the downward trend within Volume Business greatly", explained Thomas Radke, CEO of Leifheit AG.
As well as turnover, Leifheit also improved gross profit by EUR 1.2 million to EUR 27.5 million. Higher contribution margins from increased turnover and the increase of the relative gross margin by 0.4% to 47.4% contributed.
Foreign currency result supports EBIT development
Leifheit was able to increase the earnings before interest and tax (EBIT) from EUR 4.0 million in the first quarter of 2014 to EUR 7.5 million, whilst the Group also profited from a positive foreign currency result in the amount of EUR 3.2 million. The EBIT margin correspondingly increased to 12.9%. When adjusted for the foreign currency result, the EBIT was EUR 4.3 million in the first quarter of 2015, which was 10.9% above the comparable value of EUR 3.9 million in the corresponding period of previous year. After deducting taxes, the Leifheit Group generated a net result for the period of EUR 5.0 million, and was able to double the previous year's figure.
Brand Business: Dynamic development
Leifheit was able to achieve a turnover of EUR 49.5 million in the first three months of the fiscal year 2015, meaning an increase of 5.1% compared to the previous year in the Brand Business Group segment, within which the brands Leifheit and Soehnle are managed. The cleaning product category played a particular part in this dynamic development: The window vacuum cleaner range also provided the Group with very good sales figures, and the follow-up model with several new features should be brought onto the market during the second half of the year. The introduction of the new Xtra Clean broom system, amongst other things, has also developed convincingly. The laundry care product category has maintained its turnover compared to the level of the previous year, whilst the unfavourable cold weather early in the year negatively impacted on the sale of Leifheit rotary dryers. Leifheit expects corresponding catch-up effects during the second quarter. The proportion of Group turnover achieved by Brand Business increased to 85.2%. The segment EBIT amounted to EUR 5.8 million EUR in the first quarter.
Volume Business: Brakes put on downward trend
Compared to the previous year, Leifheit recorded a minor fall of 2.4% in turnover to EUR 8.6 million in the Volume Business Group segment, which consists of the subsidiaries Herby, Birambeau, and Project Business. The share of total Group turnover was therefore 14.8%. This fall, as was the case in previous years, was linked to the strategic concentration of the Leifheit Group on brands and margins. In addition, the effects of being de-listed by a French client are still noticeable. Segment EBIT came to EUR 1.7 million EUR in the first quarter.
Turnover target unchanged, profit forecast increased
Leifheit continues to expect turnover growth of 2 to 3 % at Group level for the whole of the 2015 financial year. Brand Business remains the core focus of the new "Leifheit 2020" strategy with an expected increase in turnover of 3 to 4 % as part of Group development. The Group expects consistent development of turnover within Volume Business, which has been managed with a particular focus on profitability.
However, Leifheit has increased the forecast for the operative result (EBIT) due to increased foreign currency results during the first quarter of 2015. Based on the assumption that the US dollar exchange rate remains at the level seen on 31 March 2015, Leifheit expects to achieve an EBIT of between EUR 19.0 million and EUR 20.0 million for the 2015 financial year. Initial expectations were EUR 16.4 million.
New shareholder structure with strong increase in floating stock
After the end of the first quarter, long-standing major shareholder HOME Beteiligungen GmbH stated that due to the owners changing strategic plans, they would be selling all of their 50.49% holding in Leifheit AG. International institutional investors showed great interest in the shares. Due to the much broader shareholder structure, the proportion of Leifheit shares that are now in floating stock has approximately tripled. "The departure of our major shareholder, who has been so for decades, means the end of an era in the history of Leifheit AG. We have also seen extremely positive reactions within the market on the strong increase of shares that are in floating stock. The interest that our new investors are showing in our share validates the course we have set for the continued strategic development of the Group", said Radke.
Additional information can be found in the financial report for the first quarter of 2015, which is available online at http://financial-reports.leifheit-group.com.
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 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. The Leifheit Group including its international branches employs a staff of about 1,000 employees. More information on Leifheit is available online at www.leifheit-group.com, www.leifheit.com, www.soehnle.com.
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