Leifheit AG: Operating results significantly improved with stable sales trend in the first quarter of 2014
- Group turnover remains stable and reached EUR 55.9 million
- Brand Business turnover increases by 4.1% to EUR 47.0 million
- EBIT rises to EUR 4.0 million
- Liquid funds increase to EUR 53.3 million
Nassau, 14 May 2014 - In the first quarter of 2014, the Leifheit group achieved a turnover of EUR 55.9 million, a slight increase on the previous year's turnover of EUR 55.6 million.
The operating results (EBIT) increased to EUR 4.0 million, compared to EUR 2.8 million in first quarter of the previous year. Rigorous cost discipline and the 2.9 percentage points rise of gross margin to 47.0% both contributed to this positive development. The EBIT margin reached 7.1%. Net results for the period amounted to EUR 2.5 million, representing an increase of EUR 0.7 million. Group liquidity rose by EUR 1.3 million in the first quarter of 2014, totalling EUR 53.3 million as at 31 March 2014.
"We persisted with the implementation of our strategic measures for the further development of the Leifheit Group in the first quarter of 2014. Our Brand Business turnover has increased, and Leifheit also has double-digit growth rates in the forward-looking e-commerce sector. At the same time, as announced, we have placed a strong focus on profitability this financial year", said Thomas Radke, Chairman of the Board of Management of Leifheit AG.
Sales in Brand Business increasing
In the first quarter of 2014, the Group's Brand Business segment achieved a turnover of EUR 47.0 million, an increase of 4.1% compared to the same period of the previous year. While the previous year's figure was unusually low due to the adverse weather conditions, Leifheit has also had to compensate for the departure from the market of an important customer in the home improvement/DIY sector in the first quarter of 2014. The growth achieved in Brand Business was mainly the result of the cleaning and laundry care product categories. The proportion of Group turnover represented by our Brand Business thus grew to 84.2%. The segment EBIT achieved EUR 3.4 million, compared to EUR 2.5 million in the first quarter of 2013.
The Volume Business division decreased by 14.8% to EUR 8.9 million. This decline is connected to the strategic concentration of the Leifheit Group on Brand Business and consistent management of Volume Business with a particular emphasis on profitability. Volume Business' share of Group turnover decreased to 15.8%. However, the segment EBIT increased from EUR 0.3 million to EUR 0.6 million in accordance with the objectives set.
Group forecast: Stable turnover and earnings development in 2014
The forecast for the business development of Leifheit AG remains unchanged from that stated in the 2013 annual financial report. The Group has resolved to pursue the conservative goal of stable development in 2014:
Turnover at the adjusted level of 2013 is expected. Furthermore, increased focus will be placed on Brand Business, and Volume Business will be managed with a particular emphasis on profitability.
Leifheit therefore anticipates an increase in turnover in its Brand Business of between 1% and 3% for 2014 as a whole. The company anticipates a slight decline in the turnover of the Volume Business division. Sales forecasts will be specified in more detail in the course of the year.
Operating results (EBIT) for 2014 are expected to remain at the strong 2013 level (EUR 14.9 million) as a result of the expected stable development of turnover and present focus on improving margins whilst exercising discipline with respect to costs.
In the medium term, Leifheit will continue to pursue the goal of achieving sustainable and profitable turnover growth of 3 to 5% at Group level while at the same time striving to attain a strong earnings upturn. Specifically, this means that a turnover of EUR 250 million and an EBIT margin of 8% are planned by 2016.
Additional information can be found in the Financial Report for the period ending 31 March 2014, available at http://ir.leifheit-group.com/websites/leifheit_ir/English/3100/financial-reports.html.
Founded in 1959, Leifheit AG 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. Taking into account its international branches, the Leifheit Group has around 1,000 employees in total.
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