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Leifheit AG
Quarterly Report • May 8, 2024
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Quarterly Report
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Quarterly statement for the period ending 31 March 2024
At a glance
- Group turnover in line with expectations at m€ 65.9 in the first quarter of 2024, decline of 6.2% due to expected, last-time base effects in the discounter channel
- Profitability continues to improve significantly: gross margin increases to 44.7%, especially due to positive product mix effects and productivity and efficiency increases (+4.2 percentage points)
- Group EBIT rises to m€ 3.4 (m€ +1.1)
- Positive free cash flow of m€ 1.0 in the first quarter of 2024 (previous year: m€ – 3.4)
- Forecast for 2024 confirmed: slight growth in Group turnover, Group EBIT between m€ 10 and m€ 12 expected
- Launch of further products from the successful Black Line in the core category of laundry care
- Innovation in the cleaning product category planned from July 2024
- Share buyback program with a total volume of up to m€ 8.5 resolved
- Implementation of a new, holistic business strategy with focus on core competences and profitable long-term growth from June 2024
Key figures of the Group as at 31 March
| 2023 | 2024 | Change | ||
|---|---|---|---|---|
| Turnover | ||||
| Group | m€ | 70.3 | 65.9 | –6.2% |
| Household | m€ | 58.5 | 55.4 | –5.2% |
| Wellbeing | m€ | 4.2 | 3.9 | –7.8% |
| Private Label | m€ | 7.6 | 6.6 | –13.5% |
| Profitability | ||||
| Gross margin | % | 40.5 | 44.7 | 4.2 PPS |
| Free cash flow | m€ | –3.4 | 1.0 | >100% |
| Foreign currency result | m€ | 0.4 | 0.3 | –23.1% |
| EBIT | m€ | 2.3 | 3.4 | 45.5% |
| EBIT margin | % | 3.3 | 5.2 | 1.9 PPS |
| Net result for the period | m€ | 1.3 | 2.2 | 72.8% |
Quarterly statement for the period ending 31 March 2024
Business performance
The Leifheit Group continued to face a challenging market environment and persistently weak consumption in the first quarter of 2024. The recovery in the consumer climate is progressing very slowly, with the GfK consumer climate index remaining at a very poor level of – 27.4 points in March 2024.
In the first three months of financial year 2024, the Leifheit Group generated turnover of m€ 65.9 after m€ 70.3 in the first quarter of the previous year. The 6.2% decline in turnover was in line with our expectations and is primarily due to a base effect in the same period of the previous year, in which promotions at discounters made a significant contribution to turnover. By contrast, the general reduction in non-food business in the discounter channel and the associated disappearance of special offers had an impact in the reporting period. However, the expansion of distribution in key European core markets and growth in the e-commerce channel (+ 11.6%) partially compensated the loss of turnover from the discounter business.
Despite the year-on-year decline in turnover in the first three months, which was expected, the Leifheit Group is on track and is focusing on increased advertising activities for high-margin bestsellers in the core categories of cleaning and laundry care in the second quarter. In addition to TV advertising in key European sales markets, activities are also increasingly focused on online marketing and the expansion of e-commerce.
Group turnover by region
In Germany, the Leifheit Group recorded a 21.2% fall in turnover in the first three months of financial year 2024 compared to the first quarter of the previous year. The decline was mainly due to a lack of promotional campaigns by discounters. Turnover amounted to m€ 24.3, following m€ 30.9 in the same period of 2023. As a result, the Leifheit Group generated 36.9% of its turnover in Germany (previous year: 43.9%).
All other sales regions of the Leifheit Group recorded positive development overall. In Central Europe, the Leifheit Group achieved slight turnover growth of 0.8% in the first quarter of 2024 to m€ 30.5 in total (previous year: m€ 30.2). While turnover in the Netherlands and Italy, for instance, remained below the previous year's level, the expansion of distribution and the positive development of e-commerce in important markets such as Belgium, France and Austria led to significant growth.
Turnover in the Eastern Europe region rose by a substantial 15.7% from m€ 8.0 in the first three months of 2023 to m€ 9.3 in the first quarter of 2024. The Leifheit Group achieved double-digit turnover growth in Romania and Slovakia, as well as an increased consumer demand for Leifheit brand products in the important Eastern European markets of the Czech Republic and Poland.
In markets outside Europe, turnover increased to m€ 1.8 in the first quarter of 2024 (previous year: m€ 1.2).
Group turnover by segment
In the Household segment, the Leifheit Group's turnover decreased by 5.2% to m€ 55.4 in the first quarter of 2024 (previous year: m€ 58.5). Against the backdrop of continuing general consumer restraint and a lack of promotions at discounters compared to the previous year, the laundry care and cleaning categories recorded a decline. The cleaning sector was more strongly affected by the smaller scale of campaigns involving electrical cleaning products.
In the Wellbeing segment with the Soehnle brand, the Group achieved turnover of m€ 3.9 in the first quarter of 2024 (previous year: m€ 4.2). This corresponds to a decrease of 7.8% compared to the first quarter of the previous year against the backdrop of adjustments to the product range.
Turnover in the Private Label segment, which distributes privatelabel brands through the French subsidiaries Birambeau and Herby, fell by 13.5% to m€ 6.6 in the first quarter of 2024. The significant decline from the previous year's level (previous year: m€ 7.6) was attributable to the decrease in the number of campaigns carried out by sales partners. Both Birambeau's kitchen products and Herby's laundry care products saw declines in turnover.
Net assets, financial position and results of operations
The improvement in profitability already apparent in the previous quarters continued in the first quarter of 2024. Productivity increases in production and logistics, as well as strict cost management and positive product mix effects, contributed significantly to this development. As expected, however, the significant rise in sea freight prices since the beginning of the year had a dampening effect on the margin.
Overall, the Leifheit Group significantly increased earnings before interest and taxes (EBIT) by m€ 1.1, bringing the total up to m€ 3.4 in the first three months of financial year 2024 (previous year: m€ 2.3). The rise was mainly due to the increased gross margin.
Despite the m€ 4.4 decline in turnover in the first quarter of 2024, gross profit increased by m€ 1.0 to m€ 29.5 (previous year: m€ 28.5). Accordingly, the gross margin rose significantly by 4.2 percentage points. In addition to positive product mix effects due to the focus on products manufactured in Europe, productivity and efficiency increases led to positive cost effects, which compensated for the significant increase in freight rates.
Due to higher advertising costs, distribution costs increased by m€ 0.2 to m€ 21.1 (previous year: m€ 20.9). Administrative costs remained almost stable with an increase by m€ 0.1 to m€ 4.7 (previous year: m€ 4.6) due to higher expenses for services. This was offset by higher other operating income, which totalled to m€ 0.8 (previous year: m€ 0.4). This increase by m€ 0.4 was due to a compensation payment from a competitor for patent infringements.
Earnings before taxes (EBT) rose substantially to stand at m€ 3.1 (previous year: m€ 1.9). Less taxes, this equalled a net result for the period of m€ 2.2 in the first quarter of 2024 (previous year: m€ 1.3).
The Leifheit Group remains on a solid financial footing. Group liquidity improved by m€ 0.8 in the first three months of 2024 and amounted to m€ 42.1 as at 31 March 2024 (31 December 2023: m€ 41.3). Cash inflow from operating activities amounted to m€ 1.4 in the reporting period (previous year: cash outflow of m€ 2.1). This is primarily attributable to the lower seasonal increase in working capital compared to the same period of the previous year. At the same time, liabilities rose more sharply than in the first quarter of the previous year.
At m€ 0.5, investments were down year-on-year in the first three months of 2024 (previous year: m€ 1.3).
Free cash flow increased to m€ 1.0 in the first quarter (previous year: m€ – 3.4). The positive effects from the stronger increase in liabilities, the lower increase in receivables, the better net result for the period and the lower investments outweigh the stronger increase in inventories.
The balance sheet total increased by m€ 13.1 to m€ 216.7 compared to 31 December 2023. The seasonal rise in receivables by m€ 15.3 was offset on the assets side of the balance sheet by the m€ 1.8 decline in tangible assets and the m€ 1.7 decrease in other assets.
On the liabilities side, trade payables and other liabilities increased by m€ 11.8. Equity increased by m€ 1.9, mainly due to the net result for the period. On account of the higher balance sheet total as at the reporting date, the equity ratio fell slightly to 48.8%, but remains very solid (31 December 2023: 51.0%).
Opportunities and risks
The opportunities and risks for the Leifheit Group were described in detail in the combined management report as at 31 December 2023. In the reporting period, there were no significant changes in the main opportunities and risks for the remaining months of the financial year. From today's perspective, there continue to be no risks that jeopardise the continued existence of the company.
Forecast for 2024
In 2024, we will be drawing up a new, holistic business strategy with a focus on profitable growth and cost efficiency in order to position the Leifheit Group for sustainable success. Among other things, for this we will focus on targeted investments in the Leifheit brand, significantly stronger internationalisation and the marked expansion of the e-commerce business. Going forward, we plan to continue wowing consumers with durable products featuring high product quality, as well as functional and aesthetic design. With this in mind, we also will be concentrating on strengthening Leifheit's ability to innovate and on getting even more consumers excited about our products by launching product innovations in our core categories of cleaning and laundry care.
Further products from our core categories in the Black Line were launched in the first quarter of 2024, which is expected to provide positive impetus for business development in the second quarter and beyond. In addition, a major product innovation in the cleaning category is in preparation for launch from July 2024.
Business development in the first quarter of 2024 was in line with the expectations published in March 2024 for the full year. As a result, the Board of Management of Leifheit AG confirms the forecast for 2024 and continues to expect slight year-on-year growth in Group turnover for financial year 2024 compared to the previous year. In addition, the Board of Management anticipates consolidated earnings before interest and taxes (EBIT) in the range of m€ 10 to m€ 12 and a positive free cash flow of around m€ 10.
Further information can be found in the most recently published annual report of the Leifheit Group for financial year 2023. The report is available online at https://www.leifheit-group.com/en/ investor-relations/reports-and-presentations/.
Statement of comprehensive income
| k€ | 1 Jan to 31 Mar 2023 |
1 Jan to 31 Mar 2024 |
|---|---|---|
| Turnover | 70,312 | 65,928 |
| Cost of turnover | –41,840 | –36,480 |
| Gross profit | 28,472 | 29,448 |
| Research and development costs | –1,285 | –1,217 |
| Distribution costs | –20,925 | –21,050 |
| Administrative costs | –4,605 | –4,740 |
| Other operating income | 382 | 796 |
| Other operating expenses | –43 | –92 |
| Foreign currency result | 350 | 269 |
| EBIT | 2,346 | 3,414 |
| Interest income | 36 | 171 |
| Interest expenses | –496 | –463 |
| EBT | 1,886 | 3,122 |
| Income taxes | –622 | –938 |
| Net result for the period | 1,264 | 2,184 |
| Contributions that are not reclassified in future periods in the statement of profit or loss | ||
| Actuarial gains/losses on defined benefit pension plans | –486 | 373 |
| Income taxes from actuarial gains/losses on defined benefit pension plans | 145 | –111 |
| Contributions that may be reclassified in future periods in the statement of profit or loss | ||
| Currency translation of foreign operations | 440 | –410 |
| Currency translation of net investments in foreign operations | 659 | –553 |
| Income taxes from currency translation of net investments in foreign operations | –196 | 165 |
| Net result of cash flow hedges | –412 | 397 |
| Income taxes from cash flow hedges | 115 | –111 |
| Other comprehensive income | 265 | –250 |
| Comprehensive income after taxes | 1,529 | 1,934 |
| Earnings per share based on net result for the period (diluted and undiluted) | € 0.13 | € 0.23 |
| k€ | 31 Dec 2023 | 31 Mar 2024 | |
|---|---|---|---|
| Current assets Cash and cash equivalents Trade receivables Inventories Income tax receivables Contractual assets Derivative financial instruments Other current assets Total current assets Non-current assets Intangible assets Tangible assets Right of use assets from leases Deferred tax assets Derivative financial instruments Other non -current assets Total non-current assets Total assets Current liabilities Trade payables and other liabilities Income tax liabilities Other provisions Derivative financial instruments Lease liabilities Total current liabilities Non-current liabilities Provisions for pensions and similar obligations Other provisions Deferred tax liabilities Derivative financial instruments Lease liabilities Total non-current liabilities Equity Subscribed capital Capital surplus Treasury shares |
|||
| Balance sheet Retained earnings Other reserves Total equity |
41,275 | 42,142 | |
| 43,672 | 58,955 | ||
| Total equity and liabilities | 50,213 | 51,376 | |
| 192 | 306 | ||
| 1,006 | 614 | ||
| 2 | 105 | ||
| 4,140 | 2,443 | ||
| 140,500 | 155,941 | ||
| 16,479 | 16,453 | ||
| 39,348 | 37,559 | ||
| 1,615 | 1,639 | ||
| 5,603 | 5,022 | ||
| – | 2 | ||
| 85 | 84 | ||
| 63,130 | 60,759 | ||
| 203,630 | 216,700 | ||
| 37,074 | 48,861 | ||
| 531 | 909 | ||
| 4,286 | 4,397 | ||
| 712 | 250 | ||
| 573 | 619 | ||
| 43,176 | 55,036 | ||
| 51,547 | 50,956 | ||
| 2,700 | 2,720 | ||
| 1,235 | 1,130 | ||
| 47 | 19 | ||
| 1,092 | 1,072 | ||
| 56,621 | 55,897 | ||
| 30,000 | 30,000 | ||
| 17,183 | 17,183 | ||
| –7,269 | –7,269 | ||
| 70,018 | 72,202 | ||
| –6,099 | –6,349 | ||
| 103,833 | 105,767 | ||
| 203,630 | 216,700 |
Statement of cash flow k€
| 1 Jan to 31 Mar 2023 |
1 Jan to 31 Mar 2024 |
|
|---|---|---|
| Net result for the period | 1,264 | 2,184 |
| Depreciation and amortisation | 1,961 | 1,908 |
| Change in provisions | 106 | –65 |
| Result from disposal of fixed assets and other non-current assets | –10 | –46 |
| Change in inventories, trade receivables and other assets not classified as investment or financing activities | –12,476 | –14,442 |
| Change in trade payables and other liabilities not classified as investment or financing activities | 7,229 | 11,662 |
| Other non-cash expenses and income | –204 | 228 |
| Cash flow from operating activities | –2,130 | 1,429 |
| Investments from the sale of fixed assets and other non-current assets | 19 | 82 |
| Payments for the purchase of tangible and intangible assets | –1,269 | –509 |
| Cash flow from investment activities | –1,250 | –427 |
| Payments for lease liabilities | –128 | –152 |
| Cash flow from financing activities | –128 | –152 |
| Change in cash and cash equivalents | –3,508 | 850 |
| Change in cash and cash equivalents due to exchange rates | –9 | 17 |
| Cash and cash equivalents at the start of the reporting period | 36,319 | 41,275 |
| Cash and cash equivalents at the end of the reporting period | 32,802 | 42,142 |
| Segment reporting | Key figures by reportable segments as at 31 March 2024 in m€ | Household | Wellbeing | Private Label | Total |
|---|---|---|---|---|---|
| External turnover | 55.4 | 3.9 | 6.6 | 65.9 | |
| Turnover with Group companies | 0.0 | 0.0 | 0.8 | 0.8 | |
| Gross profit | 26.1 | 1.7 | 1.6 | 29.4 | |
| Segment result (EBIT) | 2.9 | 0.1 | 0.4 | 3.4 | |
| Depreciation and amortisation | 1.7 | 0.0 | 0.2 | 1.9 |
| Key figures by reportable segments as at 31 March 2023 in m€ | Household | Wellbeing | Private Label | Total |
|---|---|---|---|---|
| External turnover | 58.5 | 4.2 | 7.6 | 70.3 |
| Turnover with Group companies | 0.0 | 0.0 | 0.8 | 0.8 |
| Gross profit | 25.1 | 1.6 | 1.8 | 28.5 |
| Segment result (EBIT) | 2.0 | 0.0 | 0.3 | 2.3 |
| Depreciation and amortisation | 1.8 | 0.0 | 0.2 | 2.0 |
Information on the segments and their management is available in the annual report 2023.
Additional information
This quarterly statement is in accordance with section 53 of the exchange rules for the Frankfurter Wertpapierbörse. It is not a quarterly financial report according to the requirements of section 115 of the German securities trading act (WpHG). It was neither audited nor reviewed by an auditor. The results of the current reporting quarter do not necessarily make it possible to draw conclusions regarding the development of future results.
The accounting and valuation principles used by Leifheit correspond to those of the most recently published consolidated financial statements as at the end of the previous financial year, while taking into consideration the accounting regulations to be applied for the first time. A detailed description can be found in the notes to the annual report 2023 of the Leifheit Group, which is available online at https://www.leifheit-group.com/en/ investor-relations/reports-and-presentations/.
The reporting period saw no personnel changes in Leifheit AG organs. There were no changes in the scope of consolidation or major changes in the organisational structure or business model.
Disclaimer
Forward-looking statements
This statement 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. They include, for example, statements on the future market environment and economic conditions, the behaviour of other market participants and government measures. If one of these or other 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 does not intend to update forward-looking statements to reflect events or developments after the date of this statement, nor does it accept any specific obligation to do so.
In the event of any discrepancies between this English translation and the German version, the German version shall take precedence.
Minor differences may occur when using rounded amounts and percentages due to commercial rounding.
Financial calendar
| 14 –15 May 2024 | Spring conference Frankfurt/Main |
|---|---|
| 29 May 2024 | Annual General Meeting German National Library, Frankfurt/Main |
| 4 Jun 2024 | ODDO BHF NEXTCAP Forum Paris (FR) |
| 8 Aug 2024 | Financial report for the first half-year ending 30 June 2024 |
| 12 Nov 2024 | Quarterly statement for the period ending 30 September 2024 |
| 25 –27 Nov 2024 | German equity forum Frankfurt/Main |
PO Box 11 65 56371 Nassau/Lahn, Germany Phone: +49 2604 977-0 www.leifheit-group.com [email protected]