Leifheit Aktiengesellschaft: Leifheit remains on course
DGAP-News: Leifheit Aktiengesellschaft / Key word(s): Quarterly / Interim Statement/Quarter Results
Leifheit remains on course
- Forecast for turnover growth and earnings confirmed
- Group turnover down slightly in the first quarter in line with expectations
- Brand Business fell short of the strong prior year quarter
- Volume Business grows by 3%
Dynamic business development in Eastern Europe continues
The Leifheit Group continued to make gains in Germany, the target region of Eastern Europe and with the e-commerce sales channel. As a result, Group turnover in Germany increased in the first quarter by 3.5% to EUR 28.9 million, accounting for a share in Group turnover of 46.2% (43.1%). Turnover of EUR 33.6 million (EUR 38.8 million) was generated in foreign markets, accounting for a share in Group turnover of 53.8% (56.9%). Business continued to expand significantly in Eastern Europe in particular, where Group turnover rose by 15.7% to EUR 6.9 million. Despite the high basis of comparison, e-commerce turnover increased by 1.6% to EUR 7.4 million.
Turnover in Brand Business, which the Leifheit and Soehnle brands are managed under, decreased in the first quarter by 4.6% to EUR 52.7 million due to the high basis of comparison from 2016. In the first three months of 2016, which was the strongest quarter of the previous year, Brand Business grew by 11.6%. It included turnover from special offers that are planned for subsequent quarters in the current financial year. Turnover in the cleaning and laundry care product categories remained largely stable. However, Leifheit faced year-on-year declines in the kitchen goods and wellbeing (Soehnle) product categories.
Turnover in the considerably smaller Volume Business segment, which is clearly geared towards profitability, grew by 3.0% to EUR 9.8 million. Special offers helped turnover in Germany in particular to expand considerably. Turnover from Herby laundry care products in France developed very positively in the quarter under review, while Birambeau was unable to continue building on the exceptionally strong performance from the previous year, as expected. As a result, turnover in France was down slightly overall in the first three months. In contrast, project business in the US experienced largely stable development.
The Leifheit Group reported EBIT for the first quarter of EUR 5.1 million (EUR 6.5 million). The EUR 1.4 million decrease was due largely to a lack of contribution margins from lower turnover. This was compounded by comparatively higher advertising costs in Brand Business. After reaching 10.0% in the first quarter of the previous year, the EBIT margin stood at 8.2%, putting it above the long-term minimum target of 8%. Less taxes, this equalled a net result for the period of EUR 3.4 million (EUR 4.3 million).
"The positive development in our focus markets of Germany, Eastern Europe and e-commerce proves once more that, despite the challenging basis of comparison from 2016, we remain on course with the systematic implementation of our 'Leifheit 2020' strategy and the continuous expansion of our product portfolio," says Thomas Radke, Chairman of the Board of Management of Leifheit AG. "Our primary objectives remain sustainable, organic turnover growth, a high level of efficiency in our value chain and the ongoing improvement of our operating result, as seen in the confirmation of our annual forecast," Radke adds.
2017 outlook unchanged
The Board of Management of Leifheit AG is focusing in the current financial year on the further systematic implementation of the "Leifheit 2020" Group strategy, particularly by expanding Brand Business and tapping into new markets. The company continues to expect a 3.5% to 4.5% increase in Group turnover for financial year 2017. Growth of 4% to 5% in turnover is expected for Brand Business - the strategic core business. In the smaller and more volatile segment, Volume Business, Leifheit anticipates that turnover will grow by 2% to 3%. The earnings forecast also remains the same. Investments in the reorganisation of sales structure in Brand Business are expected to result in one-off effects this year of between EUR 2.0 million and EUR 2.5 million. The company anticipates that EBIT will be on par with 2016, taking into consideration these non-recurring effects.
Additional information can be found in the quarterly statement for the period ending 31 March 2017, 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 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 1,000 employees. More information on Leifheit is available online at www.leifheit-group.com, www.leifheit.de, www.soehnle.de.
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