Leifheit AG

Investor Presentation • Jan 12, 2016

Leifheit AG

Investor Presentation

January 2016

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-to-date, 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.

Agenda

• Introduction to Leifheit
• Business development 9M 2015
• Update "Leifheit 2020"
• Investment highlights and outlook
• Annex

A leader in the European market of branded goods for selected household areas

Leifheit Group
Brand business (~ 80% of turnover)	Volume business (~ 20% of turnover)
 Distribution in international markets  Product categories: Cleaning, Laundry Care, Kitchen goods, Wellbeing
 High-quality branded products with a high degree of consumer benefit, mid to upper price segment  Consistent brand management  Systematic processes for innovation and market launch	 Products in mid-price range  Customer-specific product development  Strong service component
	Project Business

Offering products in four categories

Cleaning

Leifheit has an easy and convenient solution for every cleaning demand. Our high quality cleaning products can be flexibly combined.

Laundry care

Whether it's laundry dryers for the house or rotary dryers for the garden, an ironing board or a steam ironing system – Leifheit ensures fresh, clean and well-kept laundry.

Kitchen goods

Opening, cooking, cutting or storing – Leifheit's kitchen accessories simplify work and keep hands and kitchen clean.

Wellbeing

Under the Soehnle brand we offer an assortment of scales that always cut a good figure – in the kitchen and the bathroom.

Introduction to Leifheit

Operating in more than 80 countries with 15 own branches

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Main Group sites

Nassau/Germany: headquarter, marketing, sales, R&D, administration

Company grounds:	61,000 square meters
Built-up area:	26,000 square meters
Employees:	approx. 300
Fabrication:	automatic production lines, injection molding production
Main product groups:	dryers (Linomatic), cleaning and kitchen products

Zuzenhausen/Germany: logistic center

Company grounds:	85,000 square meters
Built-up area:	41,000 square meters
Employees:	approx. 100
Storage Capacity:	approx. 48,000 pallets
Order volume:	1,000 cubic meters per day

Blatná/Czech republic: main production facility

Company grounds:	108,000 square meters
Built-up area:	20,000 square meters
Employees:	approx. 400
Fabrication:	Metal production with power-coating, injection molding production, textile production
Main product groups:	dryers, ironing boards, cleaning products
Investments 2015:	€ 3 m planned in distribution logistics for Eastern Europe

Introduction to Leifheit

Distributed in every important distribution channel

Business development Q3 2015

Group 9M 2015 – turnover > € 173 m (+ 7.1%) driven by growing demand in Germany and Central Europe

• Germany grew by 7.4% and Central Europe by 8.0%
• Decline in Russia and Ukraine compensated by growth in Czech Republic, Poland and Slovakia
• Business outside Europe up by 7.3%

Group key figures 9M 2015 – EBIT rise to € 17.9 m

		9M 2015	9M 2014	∆ (%)
Group turnover	€ m	173.2	161.7	7.1
Gross margin	%	46.9	47.1	-0.2 pps
Cash flow from operating activities	€ m	13.2	22.7	-41.8
Free cash flow	€ m	8.6	19.3	-55.2
Foreign currency results	€ m	1.6	4.4	-64.6
EBIT	€ m	17.9	16.2	10.8
EBIT margin	%	10.4	10.0	0.4 pps
Earnings before income taxes (EBT)	€ m	16.9	15.0	12.4
Net result for the period	€ m	11.9	10.6	12.2

• EBIT growth outpaces sales growth due to increasing contribution margin
• Gross margin decline retarded
• Net result for the period grew slightly more than EBIT
• Cash flow from operating activities affected by an increase in inventories and a decrease in trade payables and other liabilities
• Free cash flow down due to higher investments

Brand business 9M 2015 – growth accelerated (+ 6.7%) due to high demand for Leifheit brand

		9M 2015	9M 2014	∆ (%)
Turnover	€ m	142.7	133.7	6.7
Gross margin	%	50.1	49.6	0.5 pps
Segment result (EBIT)	€ m	14.5	13.3	9.2
EBIT margin	%	10.2	9.9	0.3 pps
Employees (average number)		789	756	4.4

• Window vacuum cleaner remains bestseller
• As part of the Click-System it increasingly fosters sales of other products and solutions
• E-Commerce sales channel gains momentum
• EBIT growth follows good sales performance

Volume business 9M 2015 – Sales spiked due to initial stocking to new partner in France

		9M 2015	9M 2014	∆ (%)
Turnover	€ m	30.5	28.0	8.9
Gross margin	%	32.1	35.1	-3.0 pps
Segment result (EBIT)	€ m	3.4	2.9	18.1
EBIT margin	%	11.3	10.4	0.9 pps
Employees (average number)		261	276	-5.4

• Sales distorted by one-time effect due to initial stocking of a new partner of Birambeau in France
• Overall objective to stabilize business progresses
• Project business with kitchen products in the USA again below prior year's performance
• EBIT up due to sales performance

Project Business

Solid financial position continued

• Equity ratio up to 44.5% due to reduced pension liabilities and the performance-related increase in equity
• Group liquidity back to 2014 year-end-level despite dividend payment, build-up in inventories and investments

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Update "Leifheit 2020"

Leifheit's vision for 2020 Update "Leifheit 2020"

We are your leading experts for solutions that make your everyday life at home more easy and convenient.

"

Strategy "Leifheit 2020" will deliver higher levels of growth and excellence

• Starting with an efficient platform, solid margins and a sharpened profile Leifheit is focusing on future growth:
• Expansion of the product portfolio
• Expansion of the customer footprint
• Expansion of geographical footprint
• External growth options (focus on core categories)
• Leifheit is targeting organic growth of 5-6 % CAGR
• Leifheit defined 10 strategic guidelines to strengthen competitiveness, drive growth and increase sustained profitability:
• Where to grow?
• How to grow?
• Strategic guidelines are the basis for numerous individual projects to create the capability to deliver the growth.

Strategic guideline no. 7 Innovative and leading solutions for target users

• Leifheit is driving portfolio innovation via increased R&D and marketing power.
• Definition of innovation degrees improves advance planning and financial risk assessment.
• Further development of the innovation process ("Innovation Factory") including the consumer, design competency and stringent selection of projects to be realized.
• Targeting additional product systems with easy and convenient "hero products": from an initial product idea to a full range of product solutions – the basis for next levels of organic growth.

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Update "Leifheit 2020"

Product systems built on "hero products"

… and further extensions

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Update "Leifheit 2020"

Product system expansion driving topline growth

Leifheit CLICK system net sales

"Leifheit 2020" – on track Update "Leifheit 2020"

Status of major strategic projects

Nov. 2014

Definition of "high importance projects", e.g. Implementation of SAP EWM (extended warehouse management) New logistic center at Czech facility to boost efficiency of distribution to Eastern European markets Implementation of new corporate culture Implementation of new competence model for executives and senior staff Launch of numerous new products for the Soehnle brand in 2015 Launch of new Leifheit products e.g. brooms assortment for CLICK system in 2015 Development of new Leifheit products New products to be presented in February 2016 at the "Ambiente" trade fair in Frankfurt

"Leifheit 2020"

Geared towards further growth – organization for approx. € 280 m turnover

€ 10.0 m Turnover growth ~ € 2.0 m EBIT ~ € 1.3 m Net result € 1.0 m Dividend capacity ~ 0.20 € dividend per share I

Investment highlights and outlook

Outlook FY 2015 – focus on growth strategy; EBIT expectations specified

Economic environment 2015	 Ongoing uncertainties for the economic development in the EU in line with the Greek crisis  Risks in Eastern Europe/Russia in the light of the political crisis in the Ukraine  German trade and industry is confident for 2015, furthermore positive consumer sentiment
Group development 2015	 Establish Group strategy "Leifheit 2020" with new strategic guidelines  Group: growth by approx. 4% Brand business: growth by approx. 5% Volume business: stable development  Group EBIT outlook specified: above € 20 m expected  Investments of € 9.0 m planned, but € 7.5 m expected  Free cash flow of € 0.0 m planned, but >€ 8.0 m expected
Group development until 2020	Sustainable and profitable organic growth of 5% to 6% CAGR1)   Supplemented by external growth options (M&A)  EBIT margin target of 8%

Committed to shareholder returns

Long-term dividend development

Dividend per share / in €

Investment highlights

Strong brands	Well known, high consumer confidence ► Leading positions: Germany and many European countries ► High-quality supplier, middle and upper price range ►
Sustainable earnings	Noncyclical business: Leifheit brands are used every day ► Well prepared to exploit e-commerce potential ► Efficient cost structure, sustainable margins, high cash flow, solid financial position ►
Attractive dividend	Distribution of ca. 75% of max (free cash flow, net income) targeted ► and backed by solid cash flow
Significant growth potential	Offline/online conversion of well suited assortment ► Strategy "Leifheit 2020" to reach higher levels of profitable growth ► Organic growth through focus on core categories, consumers, innovation, digital,  efficiency External growth options (focus on core categories) 

Leifheit is more than just household products

Leifheit is more than just household products

Group FY 2014 – stable turnover with growing brand business

172.8 180.4 46.7 40.3 219.5 220.7 0 50 100 150 200 2013 2014 Volume business Brand business Group turnover by segment FY 2014 / in € m

Group turnover by region

FY 2014

• Varying development in regional markets.
• Stable domestic demand in Germany.
• Central Europe: positive stimulus from Spain and Italy; challenging economic trend in France.
• Eastern Europe: high dynamics in Poland, Czech Republic and Slovakia; declines in Russia and Ukraine as expected.

Group FY 2014 – significant increase in profitability

		2014	2013	∆ (%)
Group turnover1)	€ m	220.7	219.5	+0.5
Gross margin	%	47.7	44.9	+2.8 pps
EBIT	€ m	21.5	14.9	+44.3
Foreign currency result	€ m	5.1	-2.0	>100
EBIT adjusted2)	€ m	16.4	16.9	-2.6
EBIT margin	%	9.8	6.8	+3.0 pps
EBIT margin adjusted2)	%	7.4	7.7	-0.3 pps
Earnings before income taxes (EBT)	€ m	19.8	13.3	+48.7
Net result for the period	€ m	14.1	10.2	+37.7
ROCE	%	20.3	12.6	+7.7 pps

• Disproportional growth in earnings due to improved gross margin and extraordinary high foreign currency results
• Significant rise in ROCE by 7.7 pps mainly due to increased EBIT

1) Turnover 2013 adjusted for discontinued business with Dr. Oetker Bakeware,

2) Adjusted for foreign currency result

Group FY 2014 – improved operating cash flow

in € m	2014	2013	∆
Cash flow from operating activities	24.5	22.9	1.6
Cash flow from investment activities	-9.1	0.5	-9.6
Cash flow from financing activities	-7.8	-7.2	-0.6
Effects of exchange rate differences	0.2	1.0	-0.8
Net change in cash and cash equivalents	7.9	17.2	-9.3
Cash and cash equivalents at the end of the reporting period	58.8	51.0	7.8
Short-term securities	4.0	1.0	3.0
Group liquidity	62.8	52.0	10.8
Free cash flow1)	18.4	19.5	-1.1

• Higher cash flow from operating activities due to higher net result for the period (€ 14.1 m), depreciations in the amount of 6.3 m €, increase of receivables by 2.0 m €, increase of inventories by € 1.8 m and the increase of trade payables and other liabilities by € 8.5 m.
• Reduced cash flow from investment activities particularly due to higher investments in tangible and intangible assets of € 6.2 m (2013: € 3.6 m) and cash outflow for investments in financial assets of € 3.0 m (2013: € -2.3 m)

¹⁾ Sum of cash flow from operating activities and cash flows from investing activities, adjusted for deposits and withdrawals in financial assets and the sale of division.

Group FY 2014 – strengthening of R&D and marketing, expansion of production (enhanced insourcing)

Group FY 2014 – investments on normal level

Investments

• € 5.1 m (2013: € 3.3 m) investments in tangible assets largely related to tools for new products, machinery and factory and office equipment
• € 1.0 m (2013: € 0.3 m) investments in intangible assets (mainly software)
• Investments in Brand business: € 5.5. m Volume business: € 0.7 m
• Linking the distribution logistics for Eastern Europe at Czech plant in Blatná will lead to higher investments in 2015
• Future annual investments will remain stable at ~€ 6.0 m

Working Capital at stable levels Annex

Working Capital

in % of turnover

• Working Capital remained stable at a good level of 17.8 %
• Receivables and inventories above the year-end figures 2013 due to seasonal factors
• Liabilities rose relating to the balance sheet date

1) 2010 ultimately without consolidation of Leifheit CZ a.s.

Successful restructuring led to efficiency, improvement of margins and sharpened profile of product categories...

1	2	3	4	5	6
Company positioning	Portfolio optimization	Change Management	Performance orientation	Financial stabilization	Focusing on brand and margin
20081) Brand provider with a focus on clever and innovative household products in the core categories:	Concentration of resources on strategic business areas	Control of change processes within the organization	Standardized management processes – measurable, transparent and success-oriented	Result of the group positioning, portfolio optimization, change management and performance orientation	2014 Focus on Brand Business Organic growth: I. Convergence on
- Cleaning - Laundry Care - Kitchen - Wellbeing	- Sale of Soehnle Professional - Sale of the business unit 'bathroom' - Change of ladders segment against pressure steam ironing - Termination of the l	- General Principle - Leadership - Transparency - Employees - Innovation - Systems & Processes	- Continuous benchmarking - Profitable growth - Cost efficiency - Capital efficiency - Cash generation	- Solid cash flows - No financial liabilities	strategic focus markets II. Intensify E-commerce III. Strengthening of R&D/Innovation power IV. Brand and communication strategy with a focus
	icense agreement with Dr Oetker Bakeware				on POS External growth: V. M&A

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1) 2008 – today, settled and rolling processes

… and led to significant growth in earnings

Turnover and EBIT adjusted for Soehnle Professional (divested as of 1.1.2006)

Turnover and EBIT adjusted for bathroom division (divested in 2010)

Turnover adjusted for Dr Oetker Bakeware (termination of license agreement by 31.12.2012)

EBIT 2011 adjusted for one-off consolidation effects of € 2.5 m from obtaining control over Leifheit CZ a.s.

Investor presentation I January 2016 I p. 36 EBIT 2012 adjusted for one-off effects of € 1.2 m from sale of assets relating to termination of license agreement Dr Oetker Bakeware EBIT 2014 includes positive effects from foreign currency results in the amount of € 5.1 m, EBIT margin 2014 adjusted for this effect

"Leifheit 2020" strategic guidelines Where we will grow:

1. Consumer

• Target all females and males who use and/or shop household products for in-home use (indoor/outdoor)
• Address users who are prepared to buy brand products in the middle to upper price segment as well as value related users who are more price-conscious

2. Brands and categories

• Focus Leifheit brand on Clean & Care in the middle to upper price segment, cover additional basic price points with (a) second brand(s), target: significant growth
• Deliver acquisitions in Clean & Care categories
• Position Soehnle closer to the brand core, target: significant growth
• Revise Kitchen business model and search for a new brand, target: moderate growth

3. Regions and countries

• Develop and design for European markets
• First, exploit European growth opportunities (PL/Iberia/Nordics/UK/rest of EE), as of 2015
• Second, become intentional in exploiting US / Asia growth opportunities, as of 2018

4. Customers

• Be distributed wherever our target group wants to shop: globally and in all distribution channels
• Further strengthen e-commerce position

"Leifheit 2020" strategic guidelines How we will grow:

5. Product quality

Ensure that product quality needed to compete as a branded goods supplier is always in place

8. Innovative and leading solutions for dealers

• Enable dealers to differentiate with tailor-made solutions
• Deliver a full category approach for "Clean & Care"
• Elevate POS-Excellence across all distribution channels – online and offline = Digitally led

6. Best in class user focus

• Strengthen focus on consumer needs and in depth understanding of easiness and convenience
• Define additional search fields
• Deliver the "Design factory" for our industries

9. Value chain efficiency

• Continuous improvement of value chain efficiency: Focus on initiative development and order generation/fulfillment processes
• Continuously drive out all nonvalue adding cost

7. Innovative and leading solutions for target users

• Deliver additional product systems with easy and convenient "hero" products in the center
• Deliver products that are characterized by a brand specific, appealing design

10. Culture and employees

• Drive appropriate cultural change
• Properly develop our employees

Long-term financial overview (1|2)

		2010	2011	2012	2013	2014
Turnover	€ m	210.9	222.1	224.2	220.9	220.7
Group adjusted1) 	€ m	205.2	215.8	217.4	219.5	220.7
Brand business1) 	€ m	158.5	164.2	170.9	172.8	180.4
 Volume business	%	46.7	51.6	46.5	46.7	40.3
Profitability
 Gross margin	%	42.4	43.0	43.6	44.9	47.7
 Cash flow from operating activities	€ m	12.0	12.8	8.2	22.9	24.5
 Free cash flow	€ m	5.7	7.7	-1.4	19.5	18.4
 EBIT EBIT adjusted2) 	€ m € m	8.8 8.8	13.9 11.4	14.2 13.0	14.9 16.9	21.5 16.4
 EBIT margin	%	4.2	5.1	5.8	6.8	9.8
 EBT	€ m	6.0	12.2	12.2	13.3	19.8
-1  Net result for the period	€ m	5.5	12.1	9.4	10.2	14.1
 ROCE	%	7.8	9.7	10.2	12.6	20.3

1) Turnover adjusted for discontinued business with Dr. Oetker Bakeware

2) EBIT 2011 adjusted by one-off consolidation effects from obtaining control over Leifheit CZ a.s.

EBIT 2012 adjusted by one-off effects from sales of assets relating to termination of license agreement Dr Oetker Bakeware

EBIT 2014 adjusted by extraordinary effects from foreign currency result (€ 5.1 m)

Long-term financial overview (2|2)

		2010	2011	2012	2013	2014
Per Share
Net result1) 	€	1.15	2.55	1.97	2.16	2.97
Free cash flow1) 	€	1.20	1.63	-0.28	4.11	3.88
 Dividend	€	1.00	1.30	1.50	1.65	1.80
 Special dividend	€	2.00	--	--	--	--
Investments in tangible assets	€ m	4.4	5.4	9.3	3.3	5.2
Depreciation in tangible assets	€ m	5.4	5.3	5.3	5.5	5.3
		31/12/10	31/12/11	31/12/12	31/12/13	31/12/14
Employees
 Group	No.	1,141	1,032	1,025	1,026	1,055
 Brand business	No.	751	726	741	741	782
 Volume business	No.	390	306	284	285	273
Balance sheet total2)	€ m	207.0	198.9	205.9	203.8	223.3
Equity2)	€ m	101.5	98.9	92.8	94.7	94.8

1) Not including treasury shares

2) From 2012 in accordance with IAS 19 (revised in 2011)

Experienced Management Board Annex

Thomas Radke 54 I CEO

Core competencies:

• Driving growth via strategy and business model analysis, development and implementation
• Marketing and Sales
• M&A and post-merger integration

Previous experience:

• CEO Herlitz AG
• Member of the Board of Directors Pelikan Holding AG
• General Management, Marketing and Sales positions at Carl Zeiss Vision, Procter & Gamble/Wella, Effem/Mars and Henkel KGaA

Dr Claus-O. Zacharias 61 I CFO

Core competencies:

• Performance management, process optimisation and value creation concepts
• Controlling, Finance and Operations
• M&A and post-merger integration

Previous experience:

• CFO NICI GmbH
• CFO Lehnkering GmbH
• CFO tegut… Gutberlet Stiftung & Co.
• CFO Steilmann-Holding
• CFO Eismann International GmbH
• Controlling/Finance Suedzucker AG

European competitors by category Annex

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

Leifheit – 55 years "always a better idea" Annex

Share data and performance Annex

Short-term performance

Long-term performance

Period: 1 January 2010 to 15 December 2015

Key Data

ISIN: Ticker:	DE0006464506 LEI
Trading segment:	Prime Standard
Share capital:	€ 15,000,000.-

Number of shares:	5,000,000 no-par value ordinary bearer shares
Stock market launch:	3 October 1984
Designated Sponsor:	Oddo Seydler

Significant free float and international investors Annex

Shareholder structure

as at September 2015

Non free float shareholders1) 23.2% Free float1) 76.8%

1) Definition of German stock exchange for indices

• MKV Verwaltungs GmbH, Grünwald (D), 10.03%
• Joachim Loh, Haiger (D), 8.26%
• Treasury Shares, 4.94%
• Capital Income Builder, Los Angeles (USA), 5.6 %
• Carmignac Gestion S.A., Paris (F), 5.49%
• MainFirst SICAV, Senningerberg (LUX), 5.04%
• Union Investment Privatfonds GmbH, Frankfurt (D), 4.00%
• Farringdon, Luxemburg (LUX), 3.26%
• Share ownership under reporting threshold of 3.00%

Recent equity research Annex

Date	Recommendation	Target price	Institute
12/21/2015	buy	59.00 EUR	GSC Research GmbH
11/16/2015	hold	52.00 EUR	Oddo Seydler Bank AG
11/04/2015	buy	60.00 EUR	Bankhaus Lampe Research
08/13/2015	hold	52.00 EUR	Oddo Seydler Bank AG
08/12/2015	buy	60.00 EUR	Berenberg Bank
08/07/2015	buy	60.00 EUR	Bankhaus Lampe Research
07/06/2015	buy	60.00 EUR	Berenberg Bank
05/15/2015	hold	50.00 EUR	Oddo Seydler Bank AG
05/13/2015	buy	60.00 EUR	Berenberg Bank
05/08/2015	buy	56.00 EUR	GSC Research GmbH

This list contains the analyst reports available to us and has been drawn up to the best of our knowledge. Leifheit cannot give an assurance that the list represents a full overview of all analyst reports available on the market. Any forecasts, opinions, estimates, projections or predictions made by the analysts are theirs alone and do not represent the forecasts, opinions, estimates, projections or predictions of Leifheit or its management. Leifheit assumes no liability for the accuracy of the information therein. This list is provided for information only and is not a solicitation to buy, hold or sell shares.

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Financial calendar and contact Annex

Dates 2016

11 February 2016

Preliminary financial figures for the business year 2015

31 March 2016 Annual financial report for the business year 2015

12 May 2016

Quarterly financial report for the period ending 31 March 2016

25 May 2016 Annual General Meeting

11 August 2016

Quarterly financial report for the period ending 30 June 2016

10 November 2016

Quarterly financial report for the period ending 30 September 2016

Investor Relations

Petra Dombrowsky

Telephone:	+49 2604 977-218
Email:	ir@leifheit.com
	www.leifheit-group.com

Aktiengesellschaft

P.O. Box 11 65 56371 Nassau/Lahn, Germany www.leifheit -group.com