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Leifheit AG
Investor Presentation • Aug 8, 2024
261_ip_2024-08-08_8e59b84d-df1d-4943-9ba2-b5088d2bd145.pdf
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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.
Executive Summary: Leifheit records higher profitability in 6M 2024
New, holistic corporate strategy to become the European market leader for mechanical cleaning and drying
Focus on selected initiatives for profitable growth and cost efficiency
Group turnover at $135.0 \mathrm{~m} €$ in line with expectations, noticeable catch-up effects in the second quarter
Strong improvement in gross margin by 3.5 pp to $44.4 \%$ due to product mix effects and increased efficiency
Group EBIT up by $47.5 \%$ to $7.0 \mathrm{~m} €$,
due to improved gross margin, despite one-off effects for strategyrelated organizational adjustments in sales and marketing
Free cash flow increased by $2.3 \mathrm{~m} €$ to $9.9 \mathrm{~m} €$ due to improvement in working capital
Forecast 2024: EBIT and Free Cashflow forecast raised, turnover forecast confirmed
Product innovations (launch of PowerClean) provide positive impetus in the second half of the year
Share buyback program ongoing
with a total volume of up to $8.5 \mathrm{~m} €$
Consumer climate: slight recovery at a low level
Consumer confidence index (CCI)
Source: https://www.oecd.org/en/data/indicators/consumer-confidence-index-coi.html
GfK consumer climate index
July 2024, Germany
Source: GfK Konsumklima powered by NIM / co-funded by European commission
- Both indicators show slight recovery in consumer sentiment.
- However, there is still no strong momentum for demand in the German domestic market.
Group turnover in line with expectations -catch-up effects recorded in second quarter
Group turnover by segment, region
in $\mathrm{m} €$
| Group | Housshold | Wellbeing | Private Label | |
|---|---|---|---|---|
| Turnover in $\mathrm{m} €$ |
135.0 | 113.2 | 7.7 | 14.1 |
| Growth 6M '24 vs. 6M '23 |
$-2.2 \%$ | $-1.6 \%$ | $-10.7 \%$ | $-2.3 \%$ |
| Germany | Central Europe |
Eastern Europe |
Rest of world |
|
|---|---|---|---|---|
| Turnover in $\mathrm{m} €$ |
54.0 | 59.4 | 18.3 | 3.3 |
| Growth 6M '24 vs. 6M '23 |
$-12.3 \%$ | $3.2 \%$ | $14.1 \%$ | $13.6 \%$ |
- Q1 was negatively impacted by low discounter promotions
- Q2 signals positive catch-up effects due to advertising activities in the core categories of mechanical cleaning and laundry care and distribution expansion in important European core markets
Continuing strong demand for Leifheit Black Line
- BLACK LINE products meet the current color trend and are aimed at a target group that places high demands on design and aesthetics
- Successful extension with new Tower Dryers in H1 2024
40 years of Linomatic rotary dryer
- Successful international promotions to mark the 40th anniversary of the Linomatic rotary dryer
- Linomatic range with 8\% turnover growth in 6M 2024 vs. 6M 2023
Strong E-commerce growth of $+9.0 \%$ in 6M 2024
Distribution channels
Turnover 6M 2024 in \% (previous year's figures)
- E-commerce again one of the fastest growing channel with $+9.0 \%$ in 6M 2024
- Expanding our D2C capabilities to enable profitable growth in key markets in Western Europe
- Growth of $\mathbf{1 1 . 5 \%}$ in DIY channel in 6M 2024 due to distribution gains
- Less of promotions in the discounter channel
6M 2024 Financials
Group turnover 6M 2024 in line with expectations
Group turnover development by quarters
in $\mathrm{m} €$
EBIT increased due to improved gross margin, despite strategy-related one-off effects from organizational changes
Increasing gross margins
| Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | ||
|---|---|---|---|---|---|---|---|
| Gross Margin | $\%$ | 40.5 | 41.3 | 42.6 | 44.3 | 44.7 | 44.5 |
- Improvement in gross margin to $44.5 \%$ in Q2 2024 (Q2 2023: 41.3\%) because of
- positive product mix effects due to the focus on profitable products
- increasing productivity and efficiency in production and logistics
- slight decline in procurement and energy costs, although the costs remain at a high level
- Despite rising container freight costs due to red sea crisis
Container freight prices on the rise again
Global container freight rate index
in US dollars per 40-foot container (source: statista)
- International Container freight rates hitting over 5,800 US Dollars in June 2024 the highest value on record
Raw Material price development
- Average price increase of main raw materials appr. $+37 \%$ vs. $2020^{\circ}$
(-6\% vs. previous quarter) - Some raw material costs (esp. Packaging and Aluminium) with upward trend, price level of 2019/20 will be not reached in the short term
- Major pricing impact: increased container freight rates due to red sea crisis
*Calculation basis: average price 2020 vs. price as of March 2024
| In m€ | 6M 2023 | 6M 2024 | $\Delta$ |
|---|---|---|---|
| Cash flow from operating activities | 10.8 | 11.7 | 0.9 |
| Cash flow from investment activities | $-3.2$ | $-1.8$ | 1.4 |
| Cash flow from financing activities | $-6.9$ | $-11.0$ | $-4.1$ |
| Free cash flow ${ }^{1}$ | 7.6 | 9.9 | 2.3 |
| In m€ | 30/06/2023 | 30/06/2024 | $\Delta$ |
| Cash and cash equivalents at the end of reporting period | 37.0 | 40.2 | 3.2 |
| Financial liabilities | - | - | - |
- Free cash flow up by 2.3 m€ due to improvement of working capital
- Cash outflow from financing activities includes payment of 10.0 m€ dividend (2023: 6.7 m€) and share buy back program ( 0.7 m€ )
- With Group liquidity totaling $40.2 \mathrm{~m} €$ and without any liabilities to banks, the company continues to have a solid liquidity position
[^0]
[^0]: ${ }^{1}$ Cash flow from operating activities and from investment activities, adjusted for incoming and outgoing payments in financial assets and, if existing, from acquisition and divestiture of business divisions.
Leifheit has solid liquidity to implement the new corporate strategy
Group liquidity
$31 / 12 / 2023$ vs. 30/06/2024 in $\mathrm{m} €$
- Free cash flow increased in 6M 2024 to $9.9 \mathrm{~m} €$ (6M 2023: $7.6 \mathrm{~m} €$ )
- Positive effects from the reduction in inventories, which contributed to an improvement in working capital
- Share buyback program with a total volume of up to $8.5 \mathrm{~m} €$ until probably mid-December
- Total volume of shares purchased from 15 May 2024 up to 7 August 2024 amounts to 75.355 shares $(1.3 \mathrm{~m} €$ )
Strategy Update
Success factors for long-term success: focused corporate strategy, consistent entrepreneurial implementation and cultural changes
Our ideas to make your life easier.
OUR VISION
We are the European branded leader and specialist in mechanical cleaning and drying - with highest consumer satisfaction, an entrepreneurial culture and a sustainability mindset.
Introduction to Corporate strategy, philosophy,
vison and values
Corporate Strategy
New strategy focuses on important growth and efficiency drivers - based on our core values
Our growth drivers
Brand Positioning: Stronger, more modern Leifheit brand
- Rework to a more modern and ambitious brand positioning based on deep user insights
- Transform the brand to digital first
Focus Categories: Mechanical cleaning and drying
Market share mechanical cleaning \& drying
Core Europe markets, market share (sell-out) in \%
- Leitheit
- Rest
- Strong European growth potential for mechanical cleaning and drying
- $90 \%$ of investments and innovation priority on focus categories
*Source: Extrapolation Leitheit Market Insights based on GfK, Nielsen, Circana and own sell-in D, F, ES, IT, UK, AT, NL, PL, CH, DK, RO, CZ, B, SK
Focus Markets: High growth potential outside of Germany
- Strong growth potential outside of Germany with $77 \%$ of total market versus only $58 \%$ of internal turnover
- Defined country focus in Europe with clear growth and profit targets per country
- Country clusters:
$>$ Growth drivers
$>$ Growth and profit drivers
$>$ Focus on profitability increase
$>$ Business model review
*Source: Extrapolation Leifheit Market Insights based on GfK, Nielsen, Circana and own sell-in D, F, ES, IT, UK, AT, NL, PL, CH, DK, RO, CZ, B, SK
Innovation: Bigger + Better
First example: POWER CLEAN launch as of July 2024
E-Commerce: Full consumer journey to maximize e-commerce/digital
Our
efficiency drivers
EFFICIENCIES
Our efficiency drivers
- Focusing the company on drying and mechanical cleaning and aiming for European leadership; clear strategies for Kitchen category, Soehnle, Birambeau and Herby for sustainable success
- Transformation and digitalization of processes along the entire value chain; optimized, synchronized and harmonized (core) processes; noticeable reduction in manual work and paper
- Value optimization through pricing, cost, processes and product range optimization for improved profitability
- Lean, efficient organizational structures with a defined way of international collaboration, talent identification and a synchronized production, supply chain and logistics
- Leveraging potential through integrated communication at the point of sale - online and stationary; creating a Perfect Store
Value optimization: Steps towards lean and efficient production and logistics have been taken
Actions:
- Implementation of synchronic production cells and production lines
- Introduction of D2C dedicated assortment
Productivity production site*
Productivity Logistics D2C**
$\mathrm{D} 18-112024$
■H1 $\equiv \mathrm{H}_{2}$
- Good products per line, worker and hour
** Parcels per worker and hour
Enrichment of the Enrichment of the Enrichment
Corporate Strategy
Efficient organization: Steps towards lean and efficient organizational structures have been taken
New sales and marketing organization
- Follows the strategy with a view to the focus markets and e-commerce growth drivers:
- Global Sales Function
- Global E-Commerce Function
- New Global S\&CM to maximize POS
- New organization generates efficiencies and cost savings at the same time
New central European logistics hub
- Optimization of logistics by shortening transport routes, optimized productivity and expansion of D2C capabilities
Outlook 2024
2024 EBIT and Free Cashflow forecast raised -still challenging market environment ahead
Forecast 2024
| Group turnover | slightly above the previous year |
|---|---|
| Turnover Household | slightly above the previous year |
| Turnover Wellbeing | slightly below the previous year |
| Turnover Private Label | slightly above the previous year |
| Group EBIT | in a corridor of 11 m€ to 13 m€ (previous: corridor of 10 m€ to 12 m€) |
| Free Cashflow | about 12 m€ (previous: about 10 m€) |
- Continued weak economy and subdued consumer sentiment
- Further burdens expected from increased container freight rates in the second half of the year
Your questions, please.
Annex
Experienced Management Board
Leifheit is financially solid and pays reliable dividends to shareholders
Central and Eastern Europe with slight turnover growth, Germany influenced by shifts in sales
Group turnover by region
6M 2024 in \%
- Germany
- Central Europe
- Eastern Europe
- Rest of world
- Germany down by $-12.3 \%$,
Changed ordering processes in e-commerce led to shifts in sales, missing discounter promotions in Q1 2024
- Central Europe up by $+3.2 \%$,
Important markets Belgium, France and Spain with significant growth due to positive e-commerce development and distribution expansion
- Eastern Europe strongly up by $+14.1 \%$,
Several countries with double-digit growth rates
Turnover decline across all segments in 6M 2024 as expected, but on track for 2024 turnover forecast
Group turnover by segment
Group turnover by segment
6M 2024 in \%
- Household segment down by $-1.6 \%$, launch of further products from the successful BLACK LINE contributed to growth in the core category laundry care
- Wellbeing segment down by $-10.7 \%$ against the background of product range adjustments
- Private Label segment down by $-2.3 \%$, Birambeau achieved slight turnover growth, Herby suffered a decline in sales
Leifheit Group structure
Committed to shareholder returns
Increased efficiency and productivity led to reduction in number of employees
Distribution in all relevant distribution channels
Blue Chip client base
Distribution channels
Turnover H1 2024 in \% (previous year's figures)
Long-term financial overview
| 2019 | 2020 | 2021 | 2022 | 2023 | ||
|---|---|---|---|---|---|---|
| Group turnover | $m €$ | 234.0 | 271.6 | 288.3 | 251.5 | 258.3 |
| Profitability | ||||||
| Gross margin | $\%$ | 43.1 | 45.0 | 42.3 | 38.7 | 42.1 |
| Cash flow from operating activities | $m €$ | 15.9 | 4.0 | 16.4 | 14.0 | 20.8 |
| Free cash flow | $m €$ | 10.1 | $-5.5$ | 9.6 | 8.8 | 12.1 |
| EBIT | $m €$ | 9.9 | 18.8 | 20.1 | 2.8 | 6.0 |
| EBIT margin | $\%$ | 4.2 | 6.9 | 7.0 | 1.1 | 2.3 |
| EBT | $m €$ | 8.5 | 17.7 | 19.3 | 2.3 | 4.7 |
| Net result for the period | $m €$ | 5.8 | 12.5 | 14.2 | 1.2 | 3.2 |
| ROCE | $\%$ | 8.2 | 14.1 | 13.8 | 1.8 | 4.5 |
Long-term financial overview
| 2019 | 2020 | 2021 | 2022 | 2023 | ||
|---|---|---|---|---|---|---|
| Per share | ||||||
| Net result for the period, EPS ${ }^{2}$ | € | 0.61 | 1.32 | 1.49 | 0.13 | 0.34 |
| Free cash flow | € | 1.06 | $-0.57$ | 1.00 | 0.92 | 1.27 |
| Dividend | € | 0.55 | 1.05 | 1.05 | 0.70 | $0.95^{2}$ |
| Special dividend | € | -- | -- | -- | -- | $0.10^{2}$ |
| Investments | $m €$ | 6.0 | 9.6 | 7.3 | 5.4 | 8.9 |
| Depreciation | $m €$ | 8.2 | 8.5 | 7.8 | 7.5 | 9.0 |
| 31/12/2019 | 31/12/2020 | 31/12/2021 | 31/12/2022 | 31/12/2023 | ||
| Employees | No. | 1,106 | 1,098 | 1,080 | 1,063 | 1,020 |
| Balance sheet total ${ }^{1}$ | $m €$ | 214.6 | 230.0 | 238.8 | 216.1 | 203.6 |
| Equity | $m €$ | 96.2 | 100.4 | 111.3 | 112.5 | 103.8 |
| Equity ratio | $\%$ | 44.8 | 43.7 | 46.6 | 52.0 | 51.0 |
| Liquidity | $m €$ | 50.3 | 38.8 | 38.1 | 36.3 | 41.3 |
[^0]
[^0]: ${ }^{1}$ Not including repurchased treasury shares
${ }^{2}$ Dividend proposal
Leifheit makes top quality household products
Leifheit rückenschonender
Bodenwischer Profi XL micro Duo mit Aluminiumstiel 140 cm , Wischmopp zum Lösen mit Fußklick, mit Bezug...
$\star \star \star \star \star$ ๑ ๑ 1.728
Profi XL Set
4.5 stars
Leifheit Set Wischtuchpresse Profi XL mit Bodenwischer 146 cm und Rollen, 1x Mikrofaser Bezug für alle...
$\star \star \star \star \star$ ๑ 10.402
Pegasus 150 black 4.7 stars
Leifheit Standtrockner Pegasus 150 Solid Black Edition, standfester Wäscheständer mit Flügeln auch für lange...
$\star \star \star \star \star$ ๑ 11.534
Linomatic 600 Deluxe
4.7 stars
Leifheit Wäscheschirm Linomatic 600 Deluxe Cover mit Leineneinzug für saubere Wäsche, Wäschespinne für die...
$\star \star \star \star \star$ ๑ 8.836
Our European production and logistic footprint ensures efficient and reliable supply to customers
Leifheit awards (selection)
Soehnle awards (selection)
Kitchen Scales
Page Profi + Page Profi 300
Personal Scales Style Sense
Personal Scales Style Sense Bamboo Magic
Body analysis scales
Shape Sense Connect $100+200$
Blood pressure monitors
Systo Monitor $200+300$
Page Aqua Proof Kitchen Scale
Leifheit - 65 years of passion for housework
European competitors by category
Cleaning
| Spontex | |
|---|---|
| Tonkita | Swiffer |
| Kärcher |
| Rival | |
|---|---|
| Vileda | |
| Wenko | Gimi |
| Metaltex |
| Brabantia | Artweger | ||
Significant free float and international investors
Shareholder structure
- Non free float shareholders ${ }^{1}$ 23.17\%
- Free float ${ }^{1,2} 76.83 \%$
${ }^{1}$ Definition of German stock exchange for indices
${ }^{2}$ Including shareholdings of the management board
ESG: Strategic sustainability goals
Focus on climate neutrality till 2030
Analyse our emissions
- Climate balance for our most important sites in scope 1 and scope 2 established in 2022
- Yearly climate balance in the future to measure progress
- Substantially reduce the emissions of direct greenhouse gases (scope 1 emissions)
- $100 \%$ renewable energies with a electricity mix (scope 2 emissions)
- Substantially reduce the emissions of indirect emissions (scope 3)
- Energy:
increase efficiency, savings and share of renewable energies - Mobility:
reduce of vehicle fleet emissions at our sites, reduce $\mathrm{CO}_{2}$ emissions of employees' drive - Products:
long-lasting and highquality products with long life cycle, increase recycled share in products, packaging and displays - Distribution:
lean production, reduce transport routes and supply logistics - Compensate nonavoidable emissions by means of certified projects for climate protection
Read more at our sustainability report 2023
www.leifheit-group.com/en/investor-relations/reports-and-presentations/
Scope 1: direct emissions from the company's owned or controlled resources e.g. gas, fuel, refrigerants Scope 2: indirect emissions from purchased energy, e.g. electricity
Scope 3: indirect emissions in the value chain, (upstream + downstream)
Our ESG Principles
IEEEPSEST
What sustainability means to us:
Responsible actions toward the environment and people, corporate integrity and durable, high-quality products
Read more at our sustainability report 2023
Leifheit is frequently top company in home appliances and household goods categories
We are pleased that our efforts towards sustainability are being noticed and rewarded by consumers.
- We were awarded the "Germany's Best Sustainability" seal once again in 2023 for the third year running. The study was conducted by the IMWF Institut für Management- und Wirtschaftsforschung with research support from the Hamburg Institute of International Economics (HWWI) on behalf of Focus Money and Deutschland Test. The study analyses social listening data for some 19,600 companies and brands. It examines aspects of ecological, economic and social sustainability. The results show who is committed to sustainability from the consumer's point of view.
- As in the two previous years, the FAZ-Institut also once again awarded Leifheit the "Excellent Sustainability" certificate. The study analysed social listening data for some 20,000 companies and brands in a similar manner.
- In addition, Leifheit was awarded the "Maximum Trust 2023" award once again, achieving the highest ranking in the household products category. The study was conducted by the IMWF Institut für Managementund Wirtschaftsforschung on behalf of Focus Money and Deutschland Test.
- In the "Sustainability Champions" study conducted in cooperation with the daily newspaper Die Welt, the Leifheit and Soehnle brands were rated "very sustainable" in the "Household goods/kitchen utensils" sector. The result is based on a consumer survey in which a total of 1,291 companies from 78 sectors were assessed.
Financial calendar and contact
Financial calendar 2024
25 September 2024
Berenberg and Goldman Sachs
German Corporate Conference, Munich
12 November 2024
Quarterly statement for the period ending 30 September 2024
Investor Conference Call
25 - 27 November 2024
Deutsche Börse - German Equity Forum 2024, Frankfurt
Contact
Corporate Communications / Investor Relations
Phone: $\quad+492604977-218$
E-Mail: [email protected]
www.leifheit-group.com
LEIPHETT
Aktiengesellschaft
Postfach 1165
D-56377 Nassau