Leifheit AG

Investor Presentation • May 13, 2020

Investor Presentation Q1 2020

Henner Rinsche (CEO/CFO), Marco Keul (Vice President Finance)

13 May 2020

Disclaimer

This presentation contains forward looking statements which are based on the management's current estimates with regard to future developments. Such statements are subject to risks and uncertainties which are beyond Leifheit's ability to control or estimate precisely, such as statements on the future market environment and economic conditions, the behavior of other market participants and government measures.

If one of these uncertain or unforeseeable factors occurs or the assumptions on which these statements are based prove inaccurate, actual results could differ materially from the results cited explicitly or contained implicitly in these statements. Leifheit neither intends to, nor does it accept any specific obligation to update forward-looking statements to reflect events or developments after the date of this presentation.

Leifheit AG shall not assume any warranty for the information provided in this presentation being up-todate, accurate, complete or of good quality or for the suitability of the information for specific purposes.

Any liability of Leifheit AG for loss caused by the use or non-use of the information provided or by wrong or incomplete information is excluded.

Welcome to the conference call

Henner Rinsche CEO + CFO

Marco Keul Vice President Finance

Agenda

• Executive Summary
• Introduction to Leifheit
• Key Strategic Initiatives
• Financial Figures 3M 2020
• Annex

ETFERI ग 1
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Good 1st quarter despite Covid-19 retail shut-downs

• 2019 Q4 and 2020 Q1 TV advertising test market results confirm new scaling-up success strategy
• Corona crisis affects business, especially 2nd half of March and 2nd quarter.
  • Supply interruptions, e.g. products from China and parts from Italy.
  • Retail shut-downs because our non-food brick & mortar retailers such as DIY and electric chains have their stores closed. Consumers have less places to buy our products.
  • Biggest online retailers not buying our products because they focus their limited warehouse capacity on essential everyday products.
  • Successive reopening of brick & mortar retailers since the end of April.
• IMF: Global economy faces worst economic downturn since 1930s depression
• Due to the continuing spread of the Coronavirus and the therewith associated high degree of uncertainty, Leifheit Group's business development and financial and earnings position in the year 2020 can still not be determined.

Increased turnover and EBIT despite Covid-19

		3M 2019	3M 2020	∆
Group turnover	€ m	64.3	68.7	6.8 %
Gross margin	%	42.9	44.7	1.8 pps
EBIT adjusted for foreign currency result	€ m	3.4	4.4	30.3 %
Foreign currency result	€ m	0.5	-0.2	>- 100 %
EBIT	€ m	3.9	4.3	9.4 %
EBIT margin	%	6.0	6.2	0.2 pps
Earnings before taxes (EBT)	€ m	3.5	4.0	13.0 %
Net result for the period	€ m	2.5	2.9	17.2 %
EPS	€	0.26	0.31	19.2 %

Introduction to Leifheit

Introduction to Leifheit

Solid base to build on

Strong products and brands

Strong financial structure in € m

Investor Presentation Q1 2020 May 2020 8

Introduction to Leifheit

Leifheit Group

Introduction to Leifheit

Fortunately hypers & discounters stayed open during Covid-19 retail shut-downs

Introduction to Leifheit

Operating in more than 80 countries with 15 own branches

Introduction to Leifheit

Urgent need for change

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Can we change it? Yes we can!

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Our purpose? Happy consumers!

Investor Presentation Q1 2020 May 2020 15

Successful TV campaigns boost turnover growth in the relevant markets in Q1 2020

Turnover development selected TV markets

Group turnover in € m

CEO's strategic review

Scaling up success strategy

Create consumer demand and make brand stronger 1

Investor Presentation Q1 2020 May 2020 19

¹ Creating and pre-testing effective ads

Increase distribution

Turnover development Italy

Household and Wellbeing in € m

Improve gross margin 3

Focus on profitable Products Win-win retail negos Make in Europe Buy in Asia Average contribution margin ¹ ~42% ~34%

1 Household and Wellbeing segments

Boost profitability rockets

	Product A	Product B	Product C	Product D…
Contribution margin	medium	medium	medium	…
Level of distribution	medium	medium	medium	…
Quality and consumer satisfaction				…
	Boost consumer marketing

High consumer satisfaction with Leifheit top products 3

Profi Floor Wiper 4.6 stars

★★★★☆ 4,5 von 5
2.515 Sternebewertungen

5 Sterne	75%
4 Sterne	13%
3 Sterne	5%
2 Sterne	2%
1 Stern	4%

Linomatic 500 Deluxe 4.4 stars

5 Sterne	72%
4 Sterne	13%
3 Sterne
2 Sterne
1 Stern

Reduce all cost except consumer advertising 4

% of Group Sales	FY 2018	FY 2019	3M 2019	3M 2020	Change
Consumer Marketing	0.7%	1.7%	0.8%	5.0%	✓ +4.2pp
Other Marketing	5.4%	4.6%	5.3%	3,8%	✓ -1.5pp
R&D	2.3%	2.4%	2.2%	1.7%	✓ -0.5pp
1 Logistics	11.0%	11.5%	10.5%	9.8%	✓ -0.8pp
Administration	6.1%	6.4%	6.8%	6.6%	✓ -0.2pp
Cost of Turnover	56.4%	56.8%	57.1%	55.3%	✓ -1.8pp
OPEX 2 adj. by Consumer Marketing	94.2%	94.7%	94.0%	88.8%	✓ -5.3pp
OPEX 2	94.9%	96.4%	94.8%	93.8%	✓ -1.0pp

1 not including inbound cost 2 without other operating income/expenses

Reduce all cost except consumer advertising 4

Continuously working on an Excellence Programme to reduce complexity and costs:

- Operational excellence

• Projects to reduce Logistic costs
• Streamlining portfolio and SKU reduction by approx. 40 %
• Ratio projects to improve efficiency of our production sites
• Savings from purchasing of raw materials
• Cost savings by digitalisation, meeting efficiency, travel expenses etc.

- Structural excellence

• Board of Management reduced from 3 to 2
• Sales structure in Germany has been streamlined
• New innovation strategy has led to headcount reduction in R&D
• Leaving employees will usually not be replaced

Key financial highlights

Strong growth in Household and Wellbeing segments

Successful TV-advertising campaigns result in increased demand

• Eastern Europe with turnover increase of 13.7 %.

Increased turnover and EBIT

		3M 2019	3M 2020	∆
Group turnover	€ m	64.3	68.7	6.8 %
Gross margin	%	42.9	44.7	1.8 pps
EBIT adjusted for foreign currency result	€ m	3.4	4.4	30.3 %
Foreign currency result	€ m	0.5	-0.2	>- 100 %
EBIT	€ m	3.9	4.3	9.4 %
EBIT margin	%	6.0	6.2	0.2 pps
Earnings before taxes (EBT)	€ m	3.5	4.0	13.0 %
Net result for the period	€ m	2.5	2.9	17.2 %
EPS	€	0.26	0.31	19.2 %

Negative cash flow mainly due to turnoverrelated increase in receivables

in € m	3M 2019	3M 2020	∆
Cash flow from operating activities	0.1	-9.6	-9.7
Cash flow from investment activities	-0.9	-1.6	-0.7
Cash flow from financing activities	-0.2	-0.2	0
Change in cash and cash equivalents	-1.0	-11.3	-10.7
Cash and cash equivalents at the end of reporting period	50.0	39.0	-11.0
Free cash flow1	-0.8	-11.2	-10.4

in € m	31.12.2019	31.03.2020	∆
Cash and cash equivalents at the end of reporting period	50.3	39.0	-11.3
Group liquidity	50.3	39.0	-11.3
Financial liabilities	-	-	-

• Higher increase in trade receivables (Q1 2020: € 17.2 m, Q1 2019 € 11.6 m) as a result of turnover growth.
• Liabilities decline of € 2.2 m offset by decrease in inventories of € 1.7 m and other short-term receivables of € 2.9 m. At m€ 1.6 investments above previous year (Q1 2019: € 1.0 m).

1 Sum of cash flow from operating activities and investment activities adjusted by proceeds from sale of financial assets.

Group liquidity affected by growth-related increase in receivables

Group liquidity

31.12.2019 vs 31.03.2020 in € m

• Higher increase in trade receivables as a result of turnover growth (Q1 2019: increase € 11.6 m)
• No noteworthy effects from aging of receivables in connection with COVID-19

Forecast Financial Year 2020

Challenging market environment due to the exceptional economic situation – effects of the COVID19 pandemic on business development in 2020 still not assessable

determined.

Investor Presentation Q1 2020 May 2020 35

2020

Long-term financial overview

		2015	2016	2017	2018	2019
Group turnover	€ m	231.8	237.1	236.8	234.2	234.0
Profitability
▪ Gross margin	%	46.7	47.5	46.4	43.6	43.1
▪ Cash flow from operating activities	€ m	20.8	21.8	7.2	10.2	15.9
▪ Free cash flow	€ m	14.1	14.3	1.5	3.7	10.1
▪ EBIT EBIT adjusted1 ▪	€ m € m	21.7 19.2	22.1 21.8	18.8 20.3	13.1 12.8	9.9 9.6
▪ EBIT margin	%	9.3	9.3	8.0	5.6	4.2
▪ EBT	€ m	20.2	20.6	17.7	11.9	8.5
▪ Net result for the period	-1 € m	14.3	14.5	12.9	8.4	5.8
▪ ROCE	%	18.1	16.3	12.7	8.5	7.0

1 Adjusted by foreign currency results

Long-term financial overview

		2015	2016	2017	2018	2019
Per share1
Net result for the period2	€	1.51	1.53	1.35	0.88	0.61
Free cash flow	€	1.48	1.51	0.16	0.39	1.06
Dividend3	€	1.00	1.05	1.05	1.05	0.55
Special dividend	€	0.38	0.40	--	--	--
Investments	€ m	7.1	7.8	7.8	6.6	6.0
Depreciation	€ m	5.8	6.2	6.4	6.9	8.2
		31/12/15	31/12/16	31/12/17	31/12/18	31/12/19
Employees	No.	1,074	1,093	1,137	1,119	1,106
Balance sheet total2	€ m	237.9	239.4	224.9	221.8	214.6
Equity	€ m	106.7	104.6	98.5	101.8	96.2
Equity ratio	%	44.9	43.7	43.8	45.9	44.8
Liquidity	€ m	68.2	69.5	57.2	50.9	50.3

1 Scrip issue in June 2017, 2013 – 2016 adjusted

2 Not including repurchased treasury shares

3 2019: Proposal to the Annual General Meeting

Experienced Management

Henner Rinsche CEO + CFO

Previous experience

• President Europe at SodaStream
• Various leading positions at Henkel, Danone, PepsiCo and Procter & Gamble

Core competencies

• General management, business development and consumer goods marketing

Igor Iraeta Munduate COO

Previous experience

• Many years of experience as CTO at Igus GmbH and Stoba Präzisionstechnik
• Various technical management positions at Robert Bosch GmbH

Core competencies

• Digitalization, IoT, Industry 4.0, implementation of lean production systems, agile "Scrum" methods

Marco Keul Vice President Finance

Previous experience

• Responsible for Finance, Controlling, IT/Business processes and internal Sales services as of 01 April 2020
• 2015 2020 Head of Controlling at Leifheit AG

Core competencies

• IT, Finance & Controlling

Committed to shareholder returns

	Long-term dividend development		Dividend yield 1
	Dividend per share / in €	2019: 2.3% 2018: 5.9% 2017: 3.8%	2015: 5.6% 2014: 3.9% 2013: 5.3%
1,50	Proposal to the Annual	2016: 5.1%	2012: 5.2%
1,00	General Meeting for	2019: 0.55 €
0,50
0,00	4 6 7 8 0 3 4 6 7 8 5 9 2 5 9 1 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9	0 3 4 6 7 8 0 2 5 9 1 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0	3 4 6 7 8 2 5 9 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0
	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Bonus/special dividend	2 2 2 2 2 2 2 2 2 2 2 Dividend	2 2 2 2 2 2 2 2 2

1 Based on the particular closing price at year-end, 2019: proposal to Annual General Meeting

Soehnle awards (selection)

Shape Sense Connect 200

Blood pressure monitor Systo Monitor Connect 300 Luftreiniger AirFresh Clean 300 und Clean Connect 500

Leifheit – more than 60 years of passion for housework

Investor Presentation Q1 2020 May 2020 43

"Scaling up Success"

• New Strategy

European competitors by category

Cleaning		Laundry care
Spontex Tonkita Swiffer	Rival Vileda	Brabantia Vileda Artweger Juwel Gimi Wenko Stewi
Kärcher		Metaltex Rörets Blome
Kitchen goods		Wellbeing
Tescoma Rösle Zyliss	WMF Gefu	Laica Bosch Tanita Homedics
Oxo	Lurch Fackelmann	ADE Beurer Sanitas
Westmark Brabantia	Emsa Tefal	Withings Terraillon

Significant free float and international investors

Shareholder structure

Non free float shareholders1	25.25 %
Free float1,2	3.03% 74.75 %

1 Definition of German stock exchange for indices

2 Including shareholdings of the management board

• Joachim Loh, Haiger (GER), 10.31 %
• MKV Verwaltungs GmbH, Grünwald (GER), 10.03 %
• Leifheit AG Nassau (GER), treasury shares Aktien, 4.91 %
• Alantra EQMC Asset Management, SGIIC, SA, Madrid (ES), 10.44 %
• Teslin Capital Management BV/Gerlin NV, Maarsbergen (NL), 5.05 %
• MainFirst SICAV, Senningerberg (LUX), 5.04 %
• Blackmoor Ownership Holdings Master Limited, London (UK), 3.52 %
• Voting rights under notification threshold 50.70 %

Financial calendar and contact

Dates 2020	Contact
13 Aug 2020		Corporate Communications / Investor Relations
Financial report for the first half-year ending 30 June 2020	Phone:	+49 2604 977-218
30 Sep 2020	Email:	ir@leifheit.com
Virtual Annual General Meeting in accordance with the regulations of the C19 AuswBekG.		www.leifheit-group.com
11 Nov 2020

Quarterly statement for the period ending 30 September 2020

Aktiengesellschaft

Postfach 11 65 D-56377 Nassau