Leifheit Aktiengesellschaft: Strong turnover and earnings growth; annual forecast raised
/ Key word(s): 9 Month figures/Quarterly / Interim Statement
Leifheit AG: Strong turnover and earnings growth; annual forecast raised
Nassau, Germany, 11 November 2020 - Leifheit AG, a leading European brand supplier of household items, continued its growth trajectory in the third quarter of 2020 and recorded a significant rise in turnover and earnings in the first nine months of financial year 2020. The Leifheit Group generated earnings before interest and taxes (EBIT) of EUR 15.4 million in the first nine months of 2020. This is more than twice the previous-year figure of EUR 7.1 million. The positive earnings growth was primarily due to the systematic implementation of the Scaling Up Success growth strategy. Group turnover increased year on year by 13.9% to EUR 201.9 million. At the same time, the Leifheit Group improved the gross margin by 1.9 percentage points to 44.7%, which, combined with strict cost management, led to the disproportionately high growth in earnings. Less taxes, this equalled a net result for the period in the first nine months of 2020 of EUR 10.6 million (previous year: EUR 4.2 million) and earnings per share of EUR 1.11 (previous year: EUR 0.45).
Henner Rinsche, Chairman of the Board of Management of Leifheit AG, says: "Thanks to our growth strategy, we were able to continue the positive business development in the third quarter. Particularly in Germany we have heavily invested in TV and printed advertising again. We therefore succeeded in reversing the trend in the German market, where we recorded a growth of 8.2% in the first nine months of the year. Overall, the products advertised on TV made an above-average contribution to turnover in Germany and other European markets."
In its domestic market of Germany, the Leifheit Group generated turnover of EUR 81.5 million in the first nine months of the year (previous year: EUR 75.3 million). The large-scale TV campaign for the Leifheit brand made an important contribution to the significant growth in turnover in Germany in the third quarter. At the same time, in view of the significant growth in turnover in Central Europe, Eastern Europe and markets outside Europe, foreign turnover increased by EUR 18.5 million to EUR 120.4 million (previous year: EUR 101.9 million).
In Central Europe, the Leifheit Group recorded strong turnover growth of 17.3%, reaching a total of EUR 86.4 million in the first nine months of financial year 2020 (previous year: EUR 73.7 million). The Group was able to post significant gains in the Benelux countries, Switzerland and Austria in particular, thanks to the increased marketing activities in these regions. At EUR 24.8 million, turnover in Eastern Europe in the first three quarters of 2020 was also up 13.1% compared with the previous-year figure of EUR 21.9 million. Growth was particularly strong in the markets of Romania and Poland, where the Group posted gains of 45.8% and 23.0% respectively. Outside Europe, the Group also recorded a positive business trend, where turnover increased to EUR 9.2 million (previous year: EUR 6.3 million). Growth was particularly driven by the markets in the Far East and the US, where the Group succeeded in significantly increasing turnover in the first nine months of 2020.
In the Household segment, which markets Leifheit-brand products and generates the strongest turnover, the Leifheit Group recorded significant turnover growth of 14.5% to reach EUR 161.3 million in the first nine months of 2020 (previous year: EUR 140.9 million). The strong growth in the Household segment was particularly driven by the categories cleaning, with an increase of 20.1%, and kitchen with a growth of 30.4%. Leifheit benefited from TV advertising for cleaning products and a change in consumer behaviour due to the coronavirus. The category with the highest turnover, laundry care, also recorded positive development in the reporting period with a growth of 6.4%.
In the significantly smaller Wellbeing segment, which features the Soehnle brand, the Group generated significant turnover growth of 32.6% to EUR 18.5 million (previous year: EUR 14.0 million). In this segment, the Leifheit Group therefore achieved the strongest growth in the reporting period. The significant growth of Soehnle scales contributed significantly to the positive turnover development of the segment. Due to the consumers' greater need for hygiene, Soehnle air purifiers were also very well received by consumers, just as in the previous quarter.
The Private Label segment, which primarily distributes private-label brands through the French subsidiaries Birambeau and Herby, posted slight declines in the period under review. Turnover of EUR 22.1 million was 1.0% down on the previous year's figure of EUR 22.3 million. In France, due to coronavirus-related restrictions, major sales channels were temporarily closed and trade was particularly negatively impacted.
In the course of preparing the nine-month financial statements, the Board of Management raised its forecast for financial year 2020 and now expects Group turnover to grow by between 11% and 13% and forecasts Group EBIT of EUR 17-19 million for financial year 2020. 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.
Further information can be found in the quarterly statement for the period ending 30 September 2020, available at http://financial-reports.leifheit-group.com.
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11.11.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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