Annual Report • Apr 1, 2009
Annual Report
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Focus Innovation Speed
| 2004 | 2005 1) | 2006 | 2007 | 2008 | |||
|---|---|---|---|---|---|---|---|
| Turnover | – Household Products | € m | 237 | 214 | 206 | 202 | 204 |
| – Bathroom Furnishings | € m | 80 | 71 | 71 | 74 | 76 | |
| – Group | € m | 317 | 285 | 277 | 276 | 280 | |
| Change | % | -5 | -10 | -3 | – | 1 | |
| Foreign share | % | 57 | 58 | 58 | 58 | 60 | |
| Key return fi gures | |||||||
| Cash fl ow from operating activities | € m | 13.7 | 8.5 | 5.1 | 14.3 | 1.7 | |
| EBIT 2) | € m | -15.0 | 5.1 | 4.9 | 2.4 | 5.2 | |
| EBIT margin 3) | % | -4.2 | 2.4 | 1.8 | 0.9 | 1.9 | |
| EBT 2) | € m | -15.0 | 3.1 | 2.8 | 0.5 | 2.6 | |
| Net result for the period 2) | € m | -7.3 | -0.3 | 4.5 | -3.2 | 0.4 | |
| Net return on sales 3) | % | -1.9 | 0.3 | 1.6 | -1.2 | 0.1 | |
| Return on equity 2) | % | -6.5 | -0.3 | 4.2 | -3.1 | 0.4 | |
| Return on total capital 2) | % | -2.7 | 0.4 | 2.1 | -1.6 | 0.2 | |
| Key fi gures per share | |||||||
| Net result for the period 2) | € | -1.54 | -0.07 | 0.95 | -0.67 | 0.09 | |
| Cash fl ow 4) | € | 2.87 | 1.79 | 1.08 | 3.00 | 0.35 | |
| Dividend per share | € | – | 0.60 | 0.60 | – | 0.60 5) | |
| Employees | |||||||
| annual average | 2,070 | 1,862 | 1,491 | 1,404 | 1,521 | ||
| at year-end | – Household Products | 1,363 | 1,225 | 1,120 | 1,093 | 1,201 | |
| – Bathroom Furnishings | 601 | 549 | 313 | 318 | 329 | ||
| – Group | 1,964 | 1,774 | 1,433 | 1,411 | 1,530 | ||
| Personnel expenditure per employee | € 000 | 39 | 35 | 38 | 40 | 37 | |
| Investment in tangible assets | € m | 7 | 7 | 4 | 7 | 5 | |
| Investment ratio | % | 3.0 | 3.0 | 2.3 | 4.5 | 3.1 | |
| Depreciation on tangible assets | € m | 18 | 8 | 7 | 7 | 7 | |
| Total assets, equity and liabilities | € m | 229 | 227 | 204 | 207 | 221 | |
| Equity 6) | € m | 112 | 115 | 107 | 99 | 101 | |
| Equity-balance sheet total ratio 6) | % | 49 | 51 | 52 | 48 | 45 |
1) turnover and result presentation for 2005 based on dividend of minority interests and stripped of sold Soehnle Industriewaagen business and after reclassifi cation of pension obligation interest expenditure to the interest result
2) after dividend to minority interests
3) before dividend to minority interests
4) excluding repurchased treasury shares 5) proposal to General Meeting
6) including minority interests
| Contents | Page |
|---|---|
| CONSOLIDATED MANAGEMENT REPORT FOR THE FINANCIAL YEAR 2008 | |
| Areas of business and organisational structure | 4 |
| The economic situation | 7 |
| Business performance in the divisions | 9 |
| Earnings, assets and financial situation | 10 |
| Employees | 14 |
| Investments | 15 |
| Procurement and logistics | 15 |
| Development and innovation | 17 |
| Environmental protection | 18 |
| Risks and opportunities | 18 |
| Forecast | 20 |
| Report on events after the balance sheet date | 21 |
| CONSOLIDATED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2008 | |
| Consolidated income statement | 23 |
| Consolidated balance sheet | 24 |
| Changes in group equity | 25 |
| Group segment reporting | 26 |
| Consolidated statement of cash flow | 27 |
| Notes | 29 |
| General accounting and valuation principles | 29 |
| Notes on the consolidated income statement | 44 |
| Notes on the consolidated balance sheet | 51 |
| Organs | 71 |
| FURTHER INFORMATION | |
| Report on the Board of Management | 73 |
| Audit Opinion | 74 |
| Individual financial statements of Leifheit AG | 75 |
| Disclaimer | 75 |
| Contacts and key dates | 76 |
The Leifheit group is a European producer of branded products for selected areas of the household. The group comprises two divisions, Household Products and Bathroom Furnishings.
The Household Products division includes the brands Leifheit, Dr. Oetker Bakeware, Soehnle, Birambeau and Herby. The Bathroom Furnishings division includes the brands Kleine Wolke, Spirella and Meusch. The divisions are organised decentrally in order to ensure that the decision-making process remains close to market and customers. The divisions are largely responsible for their own commercial activities.
Leifheit AG as the parent company has been a plc under German law since 1984. Its seat and headquarters are at its place of foundation, Nassau / Lahn. Leifheit AG includes the group functions as well as parts of the operating business of the Household Products division. This mainly involves the Nassau and Zuzenhausen locations and a few branches abroad which are not legally independent. Leifheit AG also holds equity investments in the household products segment as well as all the investments in the bathroom furnishings segment shown in the Notes.
The following section presents the information required by section 315 para. 4 of the German Commercial Code (HGB) on business combinations.
As at 31 December 2008 the subscribed capital of Leifheit AG amounted to € 15,000,000, divided into 5,000,000 no-par bearer shares. Each share carries one vote under art. 16 para. 1 of the Leifheit AG articles of incorporation. All shares have the same rights and there are no differing classes of shares. As at 31 December 2008 Leifheit AG held 240,154 treasury shares. Leifheit AG has no rights arising from its treasury shares. There are no restrictions on voting rights or the transfer of shares that the Board of Management is aware of, although these might arise out of agreements between shareholders. Moreover, the shares do not confer any special rights of control.
Direct or indirect shareholdings exceeding 10% of the voting rights are the 47.34% stake held by Home Beteiligungen GmbH, Munich and the 10.03% stake of MKV Verwaltungs GmbH, Munich. The Board of Management is not aware of any other direct or indirect equity stakes in excess of 10% of the voting rights of the company, nor of control of voting rights in cases where employees hold shares in the company and do not exercise their voting rights.
The Board of Management of Leifheit AG currently has three members, each appointed by the Supervisory Board in accordance with section 84 of the German Stock Corporation Act (Aktiengesetz - AktG). Reappointment and extension of the term of office are both permitted. However, an extension of the term of office may not exceed five years. Extending the term of office requires a resolution of the Supervisory Board, which may not be passed more than one year before the end of the regular term. In urgent cases the Local Court can, on application from parties with a legitimate interest (e. g. the other members of the Board of Management), appoint a member of the board if there is a vacancy which needs to be filled (section 85 AktG). This appointment lapses as soon as the Supervisory Board appoints a member to fill the vacancy. A member of the Board of Management can only be removed for grave cause (section 84 para. 3 sentences 1 and 3 AktG). Grave causes include gross dereliction of duty, incapacity to perform one's duties properly and a vote of no confidence by the Annual General Meeting (AGM) (unless the vote of no confidence was for obviously extraneous reasons). Under art. 6 of the Leifheit AG articles of incorporation, the Supervisory Board determines the number of members of the Board of Management and can appoint the Chairman and deputy members. Leifheit AG currently has a Chairman of the Board of Management, but no deputy members.
The authority of the Board of Management to issue shares is governed by art. 4 para. 3 of the articles of incorporation:
"Until 1 May 2011, the Board of Management is authorised, subject to the approval of the Supervisory Board, to increase the company's registered share capital on one or more occasions by up to € 7,500,000 through the issue of new bearer shares against contributions in cash and/or in kind. The existing shareholders will be given a right to subscribe. However, with the consent of the Supervisory Board, the Board of Management is authorised to exclude shareholders' subscription rights in the following circumstances:
The Board of Management is authorised to determine the other details of capital increases from authorised capital with the approval of the Supervisory Board."
This rule gives the Board of Management and Supervisory Board greater freedom of action and widens the range of financing options available to Leifheit AG. It enables capital increases to be carried out independently of the timing of the AGM. The provisions correspond with generally accepted practice. To date no new shares have been issued from authorised capital. This therefore remains at € 7,500,000.
The Board of Management was authorised by a resolution of the AGM of 3 June 2008 to buy back shares amounting to up to 10% of the registered share capital by 2 December 2009 for any valid reason subject to the statutory restrictions.
This rule enhances Leifheit AG's freedom of action and widens the range of financing options on top of the authorised capital provisions set out above. The provisions correspond with generally accepted practice.
The AGM is responsible for amendments to the articles of incorporation (section 179 para. 1 sentence 1 AktG). The AGM has granted the authority to amend the wording of the articles of incorporation to the Supervisory Board under art. 18 para. 3 of the articles. In accordance with Section 179 para. 2 AktG, a resolution of the AGM to amend the articles of association requires a majority of three-quarters of the capital represented at the time the resolution is passed. The articles of association do not stipulate a higher majority.
Leifheit AG has not entered into any material agreements conditional on a change of control as a result of a takeover bid. There are currently no compensation agreements between Leifheit AG and the members of the Board of Management or staff which will take effect in the event of a takeover bid.
The information on the basic features of the compensation system as required under section 315 para. 2 no. 4 of the German Commercial Code are as follows:
The members of the Board of Management currently
receive compensation comprising fixed annual compensation, annual variable compensation and, in one case, long-term variable compensation.
The fixed annual compensation is paid monthly and is based on the responsibilities and individual contribution of the board member in question; it is reviewed at regular intervals to assess whether it is in line with the market and appropriate.
The annual variable compensation is based on the Leifheit Group's EBT and is paid following the approval of the annual financial statements. Two contracts with board members stipulate a limit for the annual variable compensation.
One employment contract with a member of the Board of Management includes long-term variable compensation in the form of a compensation component based on the share price. This involves payment in cash rather than shares. The amount of this payment component is linked to the performance of the Leifheit share price. The value of the bonus programme is assessed annually based on the Black-Scholes option price model. As at 31 December 2008, a provision of € 2,000 has been created. Provisions of € 10,000 were released in 2008.
Besides compensation for their work as members of the Board of Management of Leifheit AG, members also receive compensation in individual instances for their work as members of the management and supervisory boards of subsidiaries.
One member of the Board of Management has also received a performance-related pension commitment.
No fringe benefits are provided by the company beyond the use of company cars and reimbursement of travel expenses.
In the event of premature termination of employment, members of the Board of Management have no automatic right to a severance package. However, a severance package may be agreed individually as part of a termination agreement. Nor do the employment contracts of board members contain any "change of control" clauses.
The AGM of Leifheit AG resolved on 24 May 2006 to waive disclosure of the compensation of individual members of the Board of Management for a fiveyear period, starting with the 2006 financial year.
Compensation of the Supervisory Board is governed by the Leifheit AG articles of incorporation. In accordance with statutes and the German Corporate Governance Code, it is based on the responsibilities and activities of the members of the Supervisory Board and the company's performance. Besides fixed compensation, members of the Supervisory Board also receive variable compensation tied to the dividend.
Fixed compensation: In addition to reimbursement of expenses, including VAT on their remuneration,
members of the Supervisory Board receive fixed compensation of € 10,000 for each financial year.
Variable compensation: In addition, members of the Supervisory Board receive variable compensation for each financial year of € 100 for each € 0.01 per share dividend distributed to shareholders for the prior financial year.
The Chairman receives twice the remuneration level and the Deputy Chairman 1.5 times. Members of the Supervisory Board receive an additional 25% of the fixed compensation for Supervisory Board members for membership of a committee of the Supervisory Board. The chairman of a committee receives twice this amount.
Members of the Supervisory Board whose membership of the Supervisory Board or a committee lasts for only part of a financial year receive pro-rated compensation for each month or part thereof. Fixed compensation is paid in December of each financial year, variable compensation on the day of the AGM which formally approves the actions of the members of the Supervisory Board for the previous financial year.
The world economy began the year 2008 in robust shape in spite of the growing crisis on the financial markets. However, as the year progressed the global financial market crisis increasingly fed through to the real economy and the outlook began to deteriorate rapidly. At the time of writing, the world economy has fallen into a full-blown recession. In Germany GDP still managed to post a moderate rise of 1.3% over the year 2008 as a whole. But after a strong first three months, growth declined increasingly with each successive quarter. Consumer spending was unchanged in real terms compared with the previous year and this translated into a slight decline in German retail sales.
In keeping with our slogan "Focus – Innovation – Speed" we have set ourselves the goal of further strengthening our core competences in household products and concentrating on the product categories of laundry care, cleaning, kitchen goods and scales. We drove this strategy forward in 2008 through our purchase of the leading French laundry dryer manufacturer Herby and by acquiring the ironing division of Hailo in exchange for the household ladders segment.
The new distribution company founded with a partner in Romania took up operations in 2008. We also acquired a majority stake in the distribution company of our Czech importer. These steps to bring competences together under one roof will increase Leifheit's market impact and lay the basis for further growth and increased profitability.
In 2007 the Leifheit Group was able to bring the trend of an extended period of declining turnover to an end. In the 2008 financial year we increased turnover again slightly in spite of the difficult economic environment and achieved consolidated turnover of € 280 million, representing a 1.3% increase over the previous year's level of € 276 million. This constitutes a solid foundation for further growth.
The Household Products division contributes around 72% of Leifheit Group turnover with the brands Leifheit, Dr. Oetker Bakeware, Soehnle, Birambeau and Herby. Turnover increased by around 1% from € 202 million to € 204 million in 2008. This increase resulted predominantly from the success of the laundry care and cleaning segments, which saw substantial increases in turnover.
Trading conditions varied substantially between the different regions. Our focus on the European markets led to strong growth in Europe outside Germany. The household products' brands generated additional turnover of € 7 million here and generated total turnover of € 112 million, an increase of 7%. This increase was driven by high double-digit growth rates in a number of Eastern European countries such as Russia, the Czech Republic and Poland as well as in France, the home market of Birambeau and Herby.
In other countries this growth was offset by one-off and currency effects. The loss of a major Italian customer and the follow-on effects of restructuring in Spain had an adverse impact on the Household Products division. The fall in the dollar in the first three quarters of 2008 severely hit the brand business in the USA and other countries in the dollar zone.
In Germany the Household Products division held up well in the face of the subdued consumer spending environment and posted only a modest decline in sales. Turnover declined by 6% overall to € 78 million (2007: € 83 million).
The past year has shown that the strategy of focusing the Household Products division on the core categories of cleaning, laundry care, kitchen goods and scales is bearing fruit and as a result the Household Products division of Leifheit AG is well prepared for the forthcoming challenges of a difficult economic environment.
The Bathroom Furnishings division was once again a growth driver, contributing € 76 million or 27% of Group turnover (2007: € 74 million). The strong market position of our three bathroom furnishing brands Kleine Wolke, Spirella and Meusch in major countries in Europe enabled us to generate growth in the second half of the year in spite of the turbulent economic conditions. Turnover in Germany rose by a very satisfactory 10% to € 33 million (2007: € 30 million).
The brands Kleine Wolke and Meusch were able to increase turnover in Germany by almost 9% as a result of the highly successful new product group of
bed linen combined with an expansion of distribution channels in furniture and mail order retailing. Spirella also grew by 9% in Germany. By contrast the home textiles sector in Germany saw a decline in 2008. Kleine Wolke, Spirella and Meusch therefore grew against the market trend. Thus, the Bathroom Furnishings division managed to buck prevailing market conditions with its innovative products. There was also remarkable growth of around 25% in Eastern Europe.
Turnover outside Germany, which had grown steadily in recent years, fell by around 2%, due primarily to the fall in turnover for Spirella in France and the rise in the Swiss franc.
Leifheit has performed solidly in an increasingly difficult market environment. Earnings before interest and tax (EBIT) were € 5.2 million, better than was expected as recently as the autumn. A cost optimisation programme and a strong fourth quarter made a significant contribution to this result.
The internal financial control system is based on the two divisions of Household Products and Bathroom Furnishings. Turnover and EBIT are used as the key top-level performance indicators.
Turnover in the Household Products division rose by € 2 million compared with 2007. € 6.4 million of this increase was accounted for by the Herby Group which was acquired on 1 July 2008. The EBIT of the Household Products division improved from a € 0.7 million loss in 2007 to a profit of € 1.7 million in 2008.
Turnover in the Bathroom Furnishings division also rose by € 2 million compared with 2007. The EBIT of the Bathroom Furnishings division rose from € 5.4 million in 2007 to € 6.0 million in 2008.
| Income statement (summary) | ||
|---|---|---|
| € m | 2008 | 2007 |
| Turnover | 280 | 276 |
| EBIT | 5.2 | 2.4 |
| EBIT excluding one-off items | 5.2 | 4.6 |
| Net interest income | -2.6 | -1.9 |
| EBT | 2.6 | 0.5 |
| Income taxes | -2.2 | -3.7 |
| Net result | 0.4 | -3.2 |
The group's gross margin rose by € 0.8 million. The currency-related decline in turnover due to the weakness of the US dollar was compensated for by a corresponding reduction in purchasing prices in the Far East. The sharp rise in commodity prices over the course of 2008 had an adverse impact on margins.
Development costs rose by € 0.5 million and were invested in strengthening the company's innovation capabilities. Distribution costs increased as a result of further investments in the brand as well as increased allowences on of receivables. Administrative costs rose due to a rise in personnel costs in the subsidiaries. Other operating expenses in 2007 included expenses of € 2.2 million for the relocation of shipping facilities from Nassau to Zuzenhausen.
Earnings before interest and taxes increased by € 2.8 million from € 2.4 million in 2007 to € 5.2 million in 2008. The figure for 2007 was depressed by one-off items totalling a net € 2.2 million. Even stripping out these effects, EBIT in 2008 was € 0.6 million above the 2007 level.
The net interest expense consists mainly of the interest expense on pension obligations of € 2.3 million. Income taxes mainly comprise the income taxes payable by the subsidiaries in France and Switzerland. In 2007 deferred taxes were hit by the cut in corporation taxes in Germany.
Net profit for the period was € 0.4 million, after a loss of € 3.2 million in 2007.
Total assets grew by € 14.5 million compared with 31 December 2007 to € 221.4 million. This increase derived largely from the incorporation of the Herby Group with assets of € 11.5 million.
Trade receivables rose by € 4.6 million due to the incorporation of Herby and significantly higher turnover in December 2008 compared with the previous year. Inventories, including Herby's inventories of € 1 million, rose by € 6.6 million, due primarily to the teething troubles experienced by the distribution centre in Zuzenhausen.
The other short-term assets in 2007 contained a receivable from the sale of a property, which was paid during the reporting period. The rise in intangible assets reflects goodwill on the acquisition of the stake in the Herby Group and the steam iron business.
Short-term debt rose mainly as a result of the utilisation of overdraft facilities of € 7.7 million.
Other long-term debt rose as a result of the liabilities for payment of the purchase price for the takeover of the remaining shares in the Herby Group.
Equity rose by € 2.0 million to € 100.5 million, reflecting the net profit for the year and the initial consolidation of the Herby Group. The equity to assets ratio fell to 45.4% due to the rise in total assets.
| Cash flow statement (summary) € m | 2008 | 2007 |
|---|---|---|
| Cash flow from operating activities | 1.7 | 14.3 |
| Cash flow from investment activities | -13.6 | -6.5 |
| Cash flow from financing activities | 7.0 | -2.8 |
| Effects of exchange rate differences | 1.0 | -0.7 |
| Change in cash | -3.9 | 4.3 |
| Current funds at year-end | 6.2 | 10.1 |
In addition to the assets reported in the balance sheet, the group also uses off-balance-sheet assets to a limited degree. These consist primarily of leased or rented goods (operating leases). Off-balancesheet financing instruments are not used.
Operating activities resulted in an inflow of funds of € 1.7 million in the financial year 2008. Working capital rose, particularly due to higher receivables and inventories as well as a decline in liabilities.
The outflow of funds from investment activities rose to € 13.6 million in the year under review. Investment in tangible and intangible assets declined by € 1.1 million to € 6.6 million. There was an outlay of € 7.6 million on acquisitions in 2008.
Cash flow from financing activities mainly relates to the utilisation of bank lines.
Cash declined by € 3.9 million in the group in the year under review.
The focus of our human resources work in the 2008 financial year was on recruitment and human resources management as well as the introduction of the collective framework agreement on wages and salaries in Nassau and Zuzenhausen.
The collective framework agreement in the metalworking and electrical industry has introduced a new system for determining the remuneration of employees. The primary objective of the agreement is to abolish the former distinction between white- and blue-collar staff and to bring their pay into line in a comparable pay structure based on modern work categories.
We implemented the framework agreement in our Nassau and Zuzenhausen locations in 2008 in close co-operation with employee representatives. In doing so we have achieved increased transparency and contributed to greater pay equity.
The creation of new jobs and the protection of existing ones as well as the rising demands on qualification profiles and staff flexibility are among the main challenges for human resources management. The impact of demographic change, which is expected to lead to a shortage of qualified staff in many areas, will also lead to increased competition for staff.
As a result we need to market our own strengths as an employer and position ourselves accordingly in the marketplace. Leifheit continued to address these challenges in 2008 with a variety of measures relating to further strengthening the company's brand as an employer in the external labour market. Working in
particular with the organisation AIESEC (an independent international student association), we have begun to build up a network to strengthen our recruitment on a long-term basis at both national and international level.
| Locations | 31.12.2008 | 31.12.2007 |
|---|---|---|
| Germany | 607 | 675 |
| Czech Republic | 432 | 387 |
| France | 202 | 138 |
| Switzerland | 151 | 152 |
| Other countries | 138 | 59 |
| Group | 1,530 | 1,411 |
At the end of 2008 the Leifheit Group employed 1,530 staff, 119 more than the year before. This represented an 8% increase in staff numbers; the rise was largely due to the acquisition of Herby. 1,201 staff were employed in the Household Products division and 329 in the Bathroom Furnishings division.
Average staff numbers rose from 1,404 to 1,521 in the group. Personnel expenses were € 57 million in the 2008 financial year, unchanged from 2007.
In the year under review, 105 employees celebrated their 10th, 25th, 30th or 40th anniversaries with the company. The large number of long-service employees is proof of the strong ties between our staff and the company, particularly in an age of growing challenges from increased international competition. Overall, Leifheit benefits from a balanced mix of longservice and new employees.
Our commitment to providing high-quality training for apprentices continues to bear fruit; in the past financial year most of our apprentices completed their apprenticeships with excellent examination results. We are happy to be able to offer employment, initially on a fixed-term basis, to all of our apprentices.
Our staff are the main foundation for the success of the Leifheit Group. We depend on the abilities, commitment, enthusiasm and performance of our staff. As a result we continued our systematic approach to training and qualification for our staff in all areas in 2008.
Excluding the effects of acquisitions, total additions to noncurrent assets in the Leifheit Group were € 6.6 million in 2008 (2007: € 7.8 million), of which € 5.0 million was accounted for by tangible assets. The investment ratio was therefore 3.1% in relation to the historic cost of the tangible assets. Depreciation of tangible assets amounted to € 6.5 million.
In the Household Products division we invested € 4.0 million in tangible assets (2007: € 5.0 million), mainly in tools for new products, logistical infrastructure and software.
Investment in Bathroom Furnishings totalled € 1.1 million (2007: € 2.4 million).
In the past financial year, materials prices were characterised by unprecedented volatility. The cost of metal, plastics and freight once again rose sharply in the first half of 2008, only to undergo a drastic collapse in prices towards the end of the year.
One of our primary objectives is to react quickly and flexibly to our customers' wishes. To this end, the organisation in Guangzhou in southern China implemented a number of procurement-related processes in the past year in an effort to further reduce the procurement times and increase warehouse turnover. This has increased the speed and flexibility of purchasing in China, which has led to a marked improvement in the reaction speed of customer service.
We carried out an audit of the supply chain processes running from our suppliers to our customers in 2007. In the light of the strengths and weaknesses we identified in our informational and physical supply chain, we developed and successfully implemented process optimisations in 2008 and were able to significantly raise the efficiency of our processes on both the purchasing and the distribution side.
External conditions in Leifheit's procurement markets are constantly changing. The situation on the Chinese procurement market in 2008 was often characterised by wage increases, a rising Chinese currency against the US dollar, an anti-export tax policy with the reduction in the reimbursement of VAT for exporters, punitive duties and volatile sea freight rates. In order to reduce the impact of these uncertainties on our business, we had already begun to build up a European supplier network in recent years. In the course of 2008 we increasingly shifted our purchasing focus to Eastern Europe and Turkey as an alternative to the Far East.
Purchasing high-quality raw materials, semi-finished and finished products on attractive terms is a decisive factor in our company's success. Due to our broad product range in the Household Products and Bathroom Furnishings divisions, we work with a large number of suppliers worldwide. Our aim in this regard is to establish strategic partnerships with major suppliers and build up close and mutually beneficial cooperation. The key ingredients needed for successful co-operation are speed of response, flexibility, quality and punctuality.
Our approach in the Blatná production plant in the Czech Republic has paid off: By rigorously continuing the campaign we initiated in 2007 to improve profitability at the plant, we have been able to introduce a highly flexible manufacturing process and thus improve the operating result significantly. The focus in 2008 was on rationalisation measures and a variety of projects aimed at improving the efficiency of production. A broad-based training programme for all staff in Blatná has created solid foundations for continuing these positive changes, thereby ensuring the competitiveness of the plant for the future.
In 2007 we began to bring together the entire distribution system for the Household Products division in the Leifheit distribution centre in Zuzenhausen. We completed this process in 2008. After overcoming some logistical teething problems in the first quarter, we were able to optimise our processes and reduce costs significantly. Having a single logistical centre allows us to co-ordinate the incoming and outgoing goods flows more easily and more economically. The competitiveness of the distribution centre is ensured by identifying cost-cutting potential and ways to make the processes more efficient. On the basis of these positive developments we will be able to offer our clients a high degree of flexibility, excellent service and top-notch quality.
One of the key factors for boosting profitability and growth is a company's capacity to innovate. Leifheit gives this issue a high priority. In order to increase our innovation capacity on a long-term basis, the company has created new working structures in Household Products which will encourage the creativity of individual employees while at the same time accelerating the process of moving from the idea to the product. The value of an innovation is measured in terms of how much better it is than competitor products.
Innovation results primarily from creative teams. We have formed cross-divisional and cross-hierarchical innovation teams with staff drawn from marketing, technology and distribution. These teams will enable a quicker introduction of smart innovations to the market. In 2008 we realigned the organisational structure in quality management and restructured the application technology, product development and engineering departments in order to utilise the available resources better. In addition we are using external expertise to accelerate the build-up of competence and promote more focused project work. As a result of this we were able, for example, to develop competitive base electronics for a variety of scales. We further simplified our internal processes by introducing modern document management, so that our development work can now be processed more quickly.
In 2008 we once again introduced a large number of innovations. In Household Products this included two new kitchen helper series with modern designs and expanded functionalities. In the cleaning area we added the mop twister to the successful twister system. In addition we have developed an interchangeable handle which fits a number of different cleaning systems thanks to an intelligent click system. In the laundry care category we introduced the flexible and innovative Combifix and Linomotion clotheslines, the latter being the first rotary clothesline that can be used indoors. At Soehnle the focus was on the Style Collection, a new range of fashionable bathroom scales, in addition to body analysis scales in the middle price range and new kitchen scales.
Rugs, shower curtains, accessories and bed linen which we offer in the Bathroom Furnishings division help to make bathrooms and bedrooms feel like home. The designs and colours have to cater to consumers' tastes and also be priced attractively. We use integrated design groups to motivate consumers to make emotional purchase decisions in favour of our products.
The Leifheit Group further expanded its patent portfolio by submitting 134 new domestic and foreign patent applications in 2008. In 2008, 56 staff were employed within the group in development, patents and product management. These staff are predominantly graduates in business management and marketing, engineering and design. We spent a total of € 7.4 million on product management and development.
Protecting the environment and operating sustainably are important objectives for Leifheit AG. Implementation of these objectives is integrated into the processes at all Leifheit AG locations. We put the protection of the environment into practice on a holistic and integrated basis. Environmental awareness is included at every stage, from the environmentally friendly product right through to production and "green" recycling/disposal as well as from development to distribution stages. Consequently, improving the quality of our processes means avoiding detrimental effects on the environment.
Effective risk management is particularly important at times when the economic environment and the state of the industry are changing particularly rapidly. We regard efficient risk management as a way of protecting present and future potential success. With its global activities, Leifheit is inevitably exposed to risks which affect its commercial decisions. The function of our risk management system is to identify and evaluate these risks in a timely manner, thereby enabling us to take prompt countermeasures if necessary. The risk management system comprises the elements of risk strategy, an early warning system, risk identification, classification and management, controlling and the monitoring and control system. As part of our medium-term planning, we analyse the outlook for the markets, consumer behaviour, our trade partners and competitors and the procurement markets. The core of the risk management system is the risk inventory. This involves drawing up risk tables for all divisions listing the relevant risks, the probability of their occurrence and their impact on the company. The main risks are then reported and discussed at departmental, divisional, Board of Management and Supervisory Board meetings. Other elements of our risk management system are our planning processes, controlling and internal audit which is handled throughout the group by external consultants.
Ernst & Young AG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft examined the Leifheit Group's risk management system in the course of their audit of the annual financial statements and found no grounds for any reservations.
In the following sections we summarise the material risks known to us at present which may affect the business of the Leifheit Group.
The general risks of importance to Leifheit are primarily those arising out of economic trends in our markets, the political environment and developments on the financial markets. The impact of the global financial crisis as well as the expected consumer recession may affect our business in 2009. There are currently no risks evident on the political and tax fronts.
The ongoing globalisation and concentration within the distributive trades represent both a risk and an opportunity for Leifheit. Pressure on prices and terms is matched by opportunities to grow internationally and exploit synergies with our trade partners.
On the demand side the greatest risk is weak consumer demand and a slump in prices driven by direct imports from the Far East. Besides the strength of our brands, the keys to maintaining our success will be our capacity to innovate, our product development and the quality we offer. For this reason we attach a high priority to enhancing our superior quality standards even further while continuously developing products with increased consumer utility.
The risks associated with operating activities can be broken down into three sub-risks:
The likelihood of an outage of production facilities has been minimised to the greatest possible extent by ongoing maintenance, fire protection and other precautionary measures. Insurance policies have been taken out across the group for major incidents and business interruption. The risk of supplier outages is covered by identifying alternative competent suppliers. There are no risks to the company as a going concern currently identifiable in procurement, production, development or environmental protection.
Credit (default) risk: Transactions in financial instruments are only carried out with counterparties with excellent credit ratings, applying appropriate credit limits. Claims and default risks are managed on a decentralised basis by each individual group company. In some cases these risks are also covered via credit insurance.
The financial crisis and the ensuing recession will increase the rate of bankruptcies and with it the risk of default on receivables.
Liquidity risk: We hold sufficient credit lines to maintain our financial flexibility and liquidity based on our budget assumptions.
Market risk: We limit our exposure to fluctuations in the market value or future cash flows of derivative and non-derivative financial instruments due to market changes by entering into currency and commodity futures with banks and trading partners.
Currency risk: Currency futures are used to limit the risks attaching to future cash flows in different currencies – particularly in US dollars.
Interest rate risk: The financial debt and financial investments are subject to interest rate risk. We use interest rate analysis to manage this risk. The interest rate risk is not hedged via derivative instruments.
We limit product liability risks by means of our quality assurance, as defined in our quality management manual. We also use insurance policies to limit the financial consequences of possible loss, injury or damage. To limit possible risks from antitrust, patent and tax legislation and other regulations and statutes, we base our decisions on advice from outside experts. Beyond this, there are no material legal risks currently identifiable which have not been provided for on the balance sheet.
There are no other material risks currently identifiable.
The strategy of focusing on core categories and regions and on innovation in products and processes will create opportunities to continue growing solidly and profitably once the economic downturn is behind us. We want to further strengthen our profitability by focusing on product quality and lowest cost solutions. We are exploiting the opportunities available to
Leifheit with a wide range of measures at various levels of the group. These projects are focused on the development of new products, rationalisation projects, winning new customers and companies in core categories and regions, projects relating to working capital and the main project to raise profitability in the Household Products division, "Fit for the future".
The impact of the global financial crisis on the real economy has already reached dramatic proportions and experts expect the effects to continue to feed through in the course of the year. The IMF and EU Commission are forecasting the deepest recession since the Second World War for 2009; the EU Commission forecast for the Eurozone is for GDP to contract by 1.9 %. As an export nation, Germany is expected to be particularly badly affected, with GDP forecast to decline by 2.3 %. It remains to be seen to what extent the fiscal stimuli put in place by governments across the world will be able to cushion this decline. It also remains to be seen if rising real incomes for a significant proportion of the population in Germany as a result of higher wage agreements will act as a support to consumer spending. In the consumer area the recession may only begin to bite in the second half of the year.
Leifheit is celebrating its 50th anniversary in 2009 and we have set ourselves the goal of continuing our growth with a range of product innovations and sales promotions. The focus will remain on strengthening
our brands in the Household Products and Bathroom Furnishings divisions; in Household Products we will continue to concentrate on the core categories of laundry care, cleaning, kitchen goods and scales, never losing sight of our slogan "Focus – Innovation – Speed".
At the same time we will be taking further steps towards increasing the long-term profitability of our company with further projects aimed at streamlining costs, cutting structural costs and optimising margins.
We will be presenting ourselves as a modern and innovative company with an updated brand image, a variety of marketing campaigns, a major prize competition and an updated website which will in future include an internet shop. This will enable us to build on the strong relationship we have with our customers and create the best conditions for winning new customers. On the basis of these concerted measures and assuming that the propensity to consume remains stable, the Board of Management is optimistic that it can continue the positive trend and increase profitability in the years 2009 and 2010.
There were no events after the end of the 2008 financial year of particular importance for assessing the assets, financial situation and earnings of the Leifheit Group.
In the first two months of the new financial year 2009, group turnover was € 46 million, unchanged from the 2008 level. Turnover in Germany was € 20 million in the first two months (2008: € 19 million). With turnover of € 26 million outside Germany (2008: € 27 million), the export ratio was 57% (2008: 59%). The Household Products division contributed € 34 million (2008: € 32 million) to group turnover, with the German business accounting for € 15 million of this (2008: € 13 million). Turnover in Bathroom Furnishings was € 12 million (2008: € 14 million), of which € 5 million was in Germany (2008: € 6 million).
GROUP TURNOVER IN € m
| € 000 Notes |
2008 | 2007 |
|---|---|---|
| Turnover 1 |
279,781 | 276,122 |
| Cost of sales | -164,002 | -161,125 |
| Gross profit | 115,779 | 114,997 |
| Research and development costs 5 |
-7,414 | -6,935 |
| Distribution costs 6 |
-87,145 | -85,927 |
| Administrative costs 7 |
-17,628 | -17,169 |
| Other operating income 8 |
2,394 | 2,578 |
| Other operating expenses 9 |
-744 | -3,993 |
| Foreign currency gains/losses 10 |
209 | -1,258 |
| Profit before result from joint ventures and investments | 5,451 | 2,293 |
| Result from joint ventures 20 |
-234 | – |
| Investment income | – | 61 |
| EBIT | 5,217 | 2,354 |
| Net interest income or expense 11 |
-2,555 | -1,870 |
| EBT | 2,662 | 484 |
| Income taxes 12 |
-2,218 | -3,680 |
| Net result | 444 | -3,196 |
| Of which minority interests 13 |
25 | – |
| Of which parent company shareholders | 419 | -3,196 |
| Earnings per share (diluted and undiluted) 14 |
0.09 | -0.67 |
FOCUS – INNOVATION – SPEED
| € 000 Notes |
31.12.2008 | 31.12.2007 |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents 15 |
6,208 | 10,138 |
| Trade receivables 16 |
70,077 | 63,301 |
| Inventories 17 |
61,300 | 53,722 |
| Tax receivables | 760 | 1,683 |
| Other current assets 18 |
3,373 | 7,409 |
| Total current assets | 141,718 | 136,253 |
| Noncurrent assets | ||
| Financial assets 19 |
599 | 606 |
| Shares in joint ventures 20 |
908 | – |
| Tangible assets 21 |
47,767 | 46,404 |
| Intangible assets 22 |
20,026 | 11,837 |
| Deferred tax assets 12 |
4,959 | 5,804 |
| Other noncurrent assets 23 |
5,388 | 6,002 |
| Total noncurrent assets | 79,647 | 70,653 |
| Total assets | 221,365 | 206,906 |
| EQUITY AND LIABILITIES | ||
| Short-term debt | ||
| Trade accounts payable and other liabilities 24 |
52,093 | 53,852 |
| Derivative financial instruments | 532 | 888 |
| Income tax liabilities | 777 | 438 |
| Provisions 25 |
4,839 | 4,193 |
| Short-term borrowing | 7,672 | – |
| Total short-term debt | 65,913 | 59,371 |
| Long-term debt | ||
| Provisions 25 |
3,482 | 3,680 |
| Employee benefit obligations 26 |
43,141 | 42,328 |
| Deferred tax liabilities 12 |
3,113 | 2,505 |
| Other long-term debt 27 |
5,166 | 488 |
| Total long-term debt | 54,902 | 49,001 |
| Equity | ||
| Subscribed capital 28 |
15,000 | 15,000 |
| Capital surplus 29 |
16,934 | 16,934 |
| Treasury shares 41 |
-7,686 | -7,618 |
| Appropriated surplus 30 |
72,996 | 72,577 |
| Translation reserve 30 |
3,211 | 1,571 |
| Minority interests 31 |
95 | 70 |
| Total equity | 100,550 | 98,534 |
| Total equity and liabilities | 221,365 | 206,906 |
The changes in equity attributable to the parent company shareholders were as follows:
| € 000 | Subscribed capital |
Capital surplus |
Treasury shares |
Appro priated surplus |
Translation reserve |
Total |
|---|---|---|---|---|---|---|
| As at 1.1.2007 | 15,000 | 16,934 | -7,623 | 78,629 | 2,095 | 105,035 |
| Dividends | – | – | – | -2,856 | – | -2,856 |
| Minority interests from new formations |
– | – | – | – | – | – |
| Purchase/issue of treasury shares |
– | – | 5 | – | – | 5 |
| Net result | – | – | – | -3,196 | – | -3,196 |
| Differences from foreign currency translation |
– | – | – | – | -524 | -524 |
| As at 31.12.2007 | 15,000 | 16,934 | -7,618 | 72,577 | 1,571 | 98,464 |
| Change in consolidated companies | – | – | – | – | – | – |
| Purchase/ issue of treasury shares |
– | – | -68 | – | – | -68 |
| Net result | – | – | – | 419 | – | 419 |
| Differences from foreign currency translation |
– | – | – | – | 1,640 | 1,640 |
| As at 31.12.2008 | 15,000 | 16,934 | -7,686 | 72,996 | 3,211 | 100,455 |
The changes in Group equity were as follows:
| € 000 | Parent company shareholders |
Minority interests | Total equity |
|---|---|---|---|
| As at 1.1.2007 | 105,035 | – | 105,035 |
| Dividends | -2,856 | – | -2,856 |
| Minority interests from new formations |
– | 70 | 70 |
| Purchase/issue of treasury shares | 5 | – | 5 |
| Net result | -3,196 | – | -3,196 |
| Differences from foreign currency translation |
-524 | – | -524 |
| As at 31.12.2007 | 98,464 | 70 | 98,534 |
| Change in consolidated companies |
– | – | – |
| Purchase/issue of treasury shares | -68 | – | -68 |
| Net result | 419 | 25 | 444 |
| Differences from foreign currency translation |
1,640 | – | 1,640 |
| As at 31.12.2008 | 100,455 | 95 | 100,550 |
| Key figures by division 2008 |
Household Products |
Bathroom Furnishings |
Non allocable |
Elimina tions |
Total | |
|---|---|---|---|---|---|---|
| Turnover | € m | 204 | 76 | – | – | 280 |
| EBIT | € m | 1.7 | 6.0 | -2.5 | – | 5.2 |
| Assets | € m | 178 | 55 | 12 | -24 | 221 |
| Liabilities | € m | 114 | 41 | 3 | -38 | 120 |
| Investments | € m | 17.3 | 1.1 | – | – | 18.4 |
| Depreciation and amortisation | € m | 6.6 | 1.3 | – | – | 7.9 |
| Result from joint ventures | € m | -0.2 | – | – | – | -0.2 |
| Book value of joint venture invest ments |
€ m | 0.9 | – | – | – | 0.9 |
| Employees (annual average) | 1,195 | 326 | – | – | 1,521 |
| Key figures by region 2008 (€ m) |
Germany | Europe (exc. Germany) |
Rest of the world |
Non allocable |
Elimina tions |
Total |
|---|---|---|---|---|---|---|
| Turnover | 111 | 154 | 15 | – | – | 280 |
| Assets | 138 | 91 | 4 | 12 | -24 | 221 |
| Investments | 4.4 | 13.5 | 0.5 | – | – | 18.4 |
| Depreciation and amortisation | 5.0 | 2.4 | 0.5 | – | – | 7.9 |
| Result from joint ventures | – | -0.2 | – | – | – | -0.2 |
| Book value of joint venture investments |
– | 0.9 | – | – | – | 0.9 |
| The comparable figures for 2007 were as follows: | ||
|---|---|---|
| Key figures by division 2007 |
Household Products |
Bathroom Furnishings |
Non allocable |
Elimina tions |
Total | |
|---|---|---|---|---|---|---|
| Turnover | € m | 202 | 74 | – | – | 276 |
| EBIT | € m | -0.7 | 5.4 | -2.3 | – | 2.4 |
| Assets | € m | 154 | 49 | 15 | -11 | 207 |
| Liabilities | € m | 103 | 41 | 2 | -38 | 108 |
| Investments | € m | 5.2 | 2.5 | – | – | 7.7 |
| Depreciation and amortisation | € m | 6.4 | 1.4 | – | – | 7.8 |
| Employees (annual average) | 1,088 | 316 | – | – | 1,404 | |
| Key figures by region 2007 (€ m) |
Germany | Europe (exc. Germany) |
Rest of the world |
Non allocable |
Elimina tions |
Total |
| Turnover | 114 | 148 | 14 | – | – | 276 |
| Assets | 121 | 80 | 3 | 15 | -12 | 207 |
| Investments | 5.1 | 2.6 | – | – | – | 7.7 |
| Depreciation and amortisation | 5.3 | 2.5 | – | – | – | 7.8 |
Further information on the segment reporting is contained in Note 34.
| € 000 | 2008 | 2007 |
|---|---|---|
| Net result | 444 | -3,196 |
| Adjustments for | ||
| expense for the issue of employee shares | 2 | 5 |
| depreciation and amortisation | 7,928 | 7,770 |
| Increase in provisions | 1,115 | 200 |
| Loss/gain on disposal of noncurrent assets | 17 | -223 |
| Increase/decrease in inventories, trade receivables and other assets not classi fied as investment or financial activities |
-2,452 | 970 |
| Increase/decrease in trade payables and other liabilities not classified as investment or financial activities |
-5,397 | 8,752 |
| Cash flow from operating activities | 1,657 | 14,278 |
| Acquisition of consolidated companies and divisions less cash and cash equivalents acquired |
-6,511 | – |
| Acquisition of joint ventures | -1,142 | – |
| Acquisition of tangible and intangible assets | -6,646 | -7,746 |
| Investments in financial assets | – | -33 |
| Proceeds from the disposal of noncurrent assets | 648 | 1,301 |
| Cash flow from investment activities | -13,651 | -6,478 |
| Dividends paid to parent company shareholders | – | -2,856 |
| Equity contributions by minority shareholders | – | 70 |
| Bank borrowing | 7,099 | – |
| Purchase of treasury shares | -70 | – |
| Cash flow from financing activities | 7,029 | -2,786 |
| Effects of exchange rate differences | 1,035 | -690 |
| Net change in cash and cash equivalents | -3,930 | 4,324 |
| Current funds at the start of the period under review | 10,138 | 5,814 |
| Current funds at the end of the period under review | 6,208 | 10,138 |
| Income taxes paid | -1,798 | -1,449 |
| Interest paid | -457 | -71 |
| Interest received | 187 | 146 |
contributed as follows in the reporting year:
| € 000 | Herby | Tunifil | Total |
|---|---|---|---|
| Cash flow from operating activities | 911 | 28 | 939 |
| Cash flow from investment activities | -8 | – | -8 |
| Cash flow from financing activities | -440 | – | -440 |
Leifheit AG, with registered offices in Nassau, is focused on the development and distribution of high-quality branded products for selected areas of the home.
It drew up its consolidated financial statements for 2008 in accordance with the International Financial Reporting Standards (IFRS) formulated by the International Accounting Standards Board (IASB) as applicable in the EU, supplemented by the applicable provisions of section 315a para. 1 of the German Commercial Code. All the International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS) and interpretations of the International Financial Reporting Interpretation Committee – previously the Standing Interpretations Committee (SIC) – requiring application in the 2008 financial year were followed. The figures for 2007 were calculated on the same basis.
The financial statements expressed in euros are a fair presentation of the assets, financial situation and earnings of the Leifheit group. Unless otherwise stated, all figures are in thousands of euros.
The income statement has been drawn up in accordance with the internationally standard cost of sales method.
The consolidated financial statements are prepared in accordance with IFRS under section 315a para. 1 of the German Commercial Code (HGB) in combination with art. 4 of EC Regulation 1606/2002. The annual financial statements will be submitted to the Supervisory Board for approval in April. They will then be published without further delay.
The consolidated financial statements include Leifheit AG and the companies controlled by it. Control exists if the group directly or indirectly holds the majority of voting rights in a company and/or can determine the financial and operating policies of a company so as to profit from its activities. Minority interests and their share in net profit or loss for the period are shown separately in the balance sheet under equity and in the income statement below the net profit line.
The financial statements of subsidiaries are prepared using uniform accounting and valuation methods and the same balance sheet date as the financial statements of the parent company and the group.
Acquisitions are accounted for using the acquisition method in accordance with IFRS 3 (business combinations). All identifiable assets and liabilities are measured at fair value at the time of acquisition. Minority interests are recognised at their share in the fair value of the assets and liabilities.
If the acquisition cost of an interest exceeds the group share in the equity of the company concerned, the resulting goodwill must be capitalised. Previously undisclosed reserves and charges are carried, amortised or reversed during subsequent consolidation, depending on the corresponding assets and liabilities. Goodwill is tested at least annually for impairment at the level of the cash generating units and written down to the recoverable value if needed. Badwill is taken to profit or loss.
In addition, under IAS 38 each intangible asset must be classified as having a finite or indefinite useful life.
If an intangible asset has a finite useful life, it must be amortised over that life. The amortisation periods and methods for intangible assets with limited useful lives are reviewed at least annually and whenever there are indications of impairment. Intangible assets with indefinite useful lives are not amortised, as no time limit can be set for the period during which the asset generates economic benefits to the company. However, intangible assets with indefinite lives are reviewed annually to ensure that the carrying amount of an asset does not exceed its recoverable value. This is done whether or not there are signs of impairment.
Acquired enterprises are included in the consolidated financial statements from the time of acquisition. Intragroup balances and transactions and resulting unrealised intragroup profits and losses are eliminated in full. Provision is made for deferred tax arising from temporary differences from consolidation as required in IAS 12. The same consolidation methods were used for the financial statements for 2008 and 2007.
The following companies based both inside and outside Germany were included in the consolidated financial statements in addition to Leifheit AG. Leifheit AG directly or indirectly held the majority of voting rights in these companies as at 31 December 2008.
| Company name | Date of initial consolidation |
Share in equity and voting rights, 2008 in % |
|---|---|---|
| BTF Textilwerke GmbH, Bremen (D) | 1.1.1989 | 100.0 |
| KLEINE WOLKE AG, Berikon (CH) | 1.1.1989 | 100.0 |
| KLEINE WOLKE Textilgesellschaft mbH & Co. KG, Bremen (D) | 1.1.1989 | 100.0 |
| LEIFHEIT Espana S.A., Madrid (E) | 1.1.1989 | 100.0 |
| LEIFHEIT International (UK) Ltd., London (GB) | 1.1.1989 | 100.0 |
| SPIRELLA S.A., Embrach (CH) | 1.1.1989 | 100.0 |
| SPIRELLA France s.a.r.l., Toulouse (F) | 1.1.1989 | 100.0 |
| SPIRELLA GmbH, Nassau (D) | 1.1.1989 | 100.0 |
| LEIFHEIT s.r.o., Blatná (CZ) | 1.1.1995 | 100.0 |
| LEIFHEIT International U.S.A. Inc., Melville, NY (USA) | 1.1.1997 | 100.0 |
| MEUSCH-Wohnen-Bad und Freizeit GmbH, Bremen (D) | 1.9.1999 | 100.0 |
| BIRAMBEAU S.A.S., Paris (F) | 1.1.2001 | 100.0 |
| LEIFHEIT-BIRAMBEAU S.A.S., Paris (F) | 1.1.2001 | 100.0 |
| SOEHNLE Italia S.r.l., Brescia (I) | 1.1.2001 | 100.0 |
| LEIFHEIT Distribution S.R.L., Bucharest (RO) | 18.12.2007 | 51.0 |
| HERBY Industrie S.A., La Loupe (F) | 1.7.2008 | 60.0 |
| TUNIFIL S.A., Sousse (TUN) | 1.7.2008 | 60.0 |
In the 2008 financial year, a 60% stake was acquired in Herby Industrie S.A. This company in turn holds 100% of the shares in Tunifil S.A.
As a result of the nature of the agreement for the acquisition of the remaining shares, the acquisition was accounted for in accordance with IFRS 3 as if Leifheit AG had already acquired a 100% stake at the date of the acquisition.
Where individual financial statements of consolidated companies are drawn up in local currencies, monetary items in foreign currencies (cash and cash equivalents, receivables, payables) are valued at the balance sheet date and exchange rate differences recognised in the income statement. Exceptions to this are translation differences for monetary items which in substance are part of net investment (e.g. long-term loan which replaces equity) in an independent foreign entity.
Translation of financial statements of consolidated companies drawn up in foreign currencies is done on the basis of the functional currency concept using the modified closing rate method in compliance with IAS 21.
As our subsidiaries and branches operate independently in financial, commercial and organisational terms, their functional currency is usually the local currency. For inclusion in the consolidated financial statements, the assets and liabilities of the subsidiaries and branches are translated at the exchange rate at the balance sheet date, and income and expenses are translated at annual average exchange rates. The exchange difference arising out of translation is recognised in a separate reserve in equity. Exchange differences compared with the previous year's translation are taken to this translation reserve.
The exchange rates used for translation are shown in the following table:
| Exchange rate (per euro) | Mid-rate on balance sheet date | Annual average rate | ||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 2008 | 2007 | |
| Pound sterling | 0.96 | 0.73 | 0.96 | 0.73 |
| Swiss franc | 1.49 | 1.66 | 1.58 | 1.64 |
| Czech koruna | 26.59 | 26.58 | 25.01 | 27.70 |
| US dollar | 1.40 | 1.47 | 1.48 | 1.34 |
| Japanese yen | 126.40 | 165.00 | 153.76 | 161.37 |
| New Romanian lei | 4.00 | 3.59 | 3.66 | – |
| Tunisian dinar | 1.84 | – | 1.81 | – |
Cash includes cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible into a given amount of cash at any time and are subject to an insignificant risk of changes in value.
Receivables are recognised at fair value or at fair value of the consideration received at the time revenue is realised, and subsequently valued at amortised cost, taking into account any necessary write-downs.
Foreign exchange futures contracts are used to hedge against future exchange rate fluctuations. When entering into these hedging transactions, specific foreign exchange derivatives contracts are allocated to specific fundamental transactions, i.e. either to hedge the risk of a change in the fair value of a recognised asset or debt, or to hedge the risk of fluctuations in cash flows which can be allocated to a specific risk associated with a recognised asset or debt or the risk associated with a planned transaction. In the context of hedging, the hedging instruments are recognised at market value; mark-to-market adjustment is made in the income statement as the formal requirement of explicit designation for hedge accounting is not met.
Inventories are recognised at the lower of cost and net realisable value. Cost is measured on the basis of the weighted average cost method.
Costs of manufacture of self-produced products include production-related full costs based on normal capacity utilisation. Costs of manufacture include direct costs directly attributable to products (e.g. material and labour) and fixed and variable production overheads (e.g. material and production overheads). Costs are specifically taken into account which are incurred by the specific cost centres. Borrowing costs are not capitalised as part of purchase or production costs but are expensed in the period in which they are incurred (IAS 23).
The risks in holding inventory due to reduced realisable value are taken into account through appropriate write-downs. The write-downs are calculated on the basis of the future sales plan range or actual consumption. Depending on the individual inventory item, individual periods are applied which are reviewed and modified on the basis of objective evaluation criteria. In the measurement, lower
net realisable value on the balance sheet date is taken into account. If the circumstances which previously caused inventories to be written down no longer apply so that the net realisable value is increased, the resulting increase in value is recognised as a reduction in material cost.
Noncurrent financial assets are recognised at fair value and include equity investments and other financial assets. If fair value cannot be measured reliably, the assets are carried at amortised cost.
Tangible assets are recognised at cost less accumulated regular depreciation and impairment. If tangible assets are sold or scrapped, the associated costs and cumulated depreciation are derecognised; any realised profit or loss from the disposal is recognised in the income statement.
The cost of a tangible asset comprises the purchase price including import duties and non-refundable purchase taxes, and any directly attributable costs of bringing the asset into working condition and to the location for its intended use. Subsequent expenses such as maintenance and repair costs incurred after the assets have been commissioned are recognised as an expense in the period in which they are incurred.
Depreciation uses the straight line method based on the expected useful life:
| Years | |
|---|---|
| Buildings | 25–50 |
| Other structures | 10–20 |
| Injection moulding machines | 10 |
| Plant and machinery | 5–10 |
| Injection moulding and stamping tools | 3–6 |
| Vehicles | 6 |
| IT equipment | 3–5 |
| Software | 4–8 |
| Furniture and fixtures and office equipment | 3–13 |
| Display and POS stands | 3 |
The useful life and method of depreciation for tangible assets are reviewed periodically to ensure that the method of depreciation and depreciation period comply with the expected useful life of the tangible assets.
Plant under construction is classified as unfinished assets and recognised at cost. Plant under construction is depreciated from the time at which the relevant asset is completed and used in operation.
In the case of finance leases, where substantially all the risks and rewards of ownership of an asset are transferred to Leifheit, the leased asset is recognised in the balance sheet at the date the lease is arranged. The asset is recognised at the lower of its fair value and the present value of the minimum lease payments. Leasing payments are apportioned between the finance charge and the reduction of the outstanding liability so as to produce a constant periodic rate of interest on the remaining balance of the liability over the lease term. Financing expenses are recognised immediately through profit or loss.
If it is not reasonably certain that Leifheit will obtain ownership of the asset at the end of the lease term, the asset is depreciated over the shorter of the lease term and its useful life.
Operating lease payments are recognised as an expense on a straight line basis over the term of the lease.
Expense on patents and licences is capitalised and subsequently amortised over their likely useful life using the straight line method. The estimated useful life of patents and licences varies between five and fifteen years. The carrying amount of assets is regularly reviewed.
Costs of new software and implementation are capitalised and treated as an intangible asset, unless these costs are an integral part of the associated hardware. Software is amortised over a period of four to eight years using the straight line method.
Consideration paid for brand names is carried as an asset. Brand names are recognised under IAS 38 as intangible assets with indefinite useful lives and are not amortised, as no time limit can be set for the period during which the asset generates economic benefits to the company. Brand names are assessed annually for possible impairment in accordance with IAS 36 and written down if necessary to their fair value.
The excess of the cost of an acquisition over the interest in the fair value of identifiable assets and liabilities acquired on the day of purchase is known as goodwill and is recognised as an asset. In accordance with IFRS 3 in combination with IAS 36 and IAS 38, goodwill is assessed annually and written down, if necessary, to the recoverable amount. For the impairment test, the value of the asset at the time of acquisition is allocated to the cash-generating units at the lowest level in the company at which the asset is monitored for internal management purposes.
Tangible and intangible assets are assessed for impairment if there is a change in circumstances or material grounds for believing that the carrying amount of an asset may not be recoverable (IAS 36). As soon as the carrying value of an asset exceeds the recoverable
amount, an impairment loss is recognised in the income statement. The recoverable amount is the higher of the asset's net selling price and its value in use. The net selling price is the amount obtainable from the sale of an asset in an arm's length transaction, less the cost of disposal. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. The recoverable amount is identified for each asset individually or, if this is not possible, for the cash-generating unit to which the asset belongs.
Development costs for newly developed products are capitalised in accordance with IAS 38 if they are clearly attributable and both technical feasibility and marketing of the newly developed products are ensured. Development work must also generate probable future economic benefits. As not all these requirements are met in the Leifheit Group, development costs are not capitalised. Research costs cannot be capitalised in accordance with IAS 38 and are accordingly recognised directly as an expense in the income statement.
Deferred taxes are accounted for using the balance sheet liability method for all temporary differences between the tax base of an asset or liability and its carrying amount in the consolidated balance sheet. In addition, deferred tax assets from loss carryforwards must be recognised. The carrying amount of deferrals is the probable tax liability or asset in the following financial year based on the tax rate prevailing at the time of realisation.
Deferred tax assets whose realisation is or becomes improbable are not recognised or are written down. Deferred taxes are reported separately in the balance sheet.
On initial recognition, liabilities are recognised at fair value of the consideration received, less transaction costs relating to any borrowing to fund the liability. After initial recognition, interest-bearing loans are subsequently valued at amortised cost using the effective interest rate method. For short-term liabilities, amortised cost is usually equal to the nominal amount.
Under IAS 37, provisions are recognised where there is a current obligation to third parties as a result of a past event which will probably lead to an outflow of resources and can be reliably estimated. Provisions for warranty claims are recognised under IAS 37 on the basis of the previous or estimated future outflows for the warranty obligations on the products sold. Other provisions are recognised under IAS 37 for all identifiable risks and uncertain obligations for the amount probably required to settle them and not offset against reimbursement claims. Provisions which do not lead to an outflow of resources in the following year are recognised at the discounted amount required to settle the obligations at the balance sheet date. The discount is subject to market interest rates.
The actuarial valuation of the defined benefit obligation is based on the projected unit credit method required by IAS 19 for post-employment benefit obligations. Under this method, the post-employment benefits and vested benefits known at the balance sheet date are taken into account together with expected future increases in salaries and pensions. Actuarial gains and losses are recognised in the income statement if the balance of cumulated unrecognised actuarial gains and losses for each individual plan at the end of the preceding reporting period exceeds the higher of 10 % of the defined benefit obligation or 10 % of the fair value of the plan assets. These gains and losses are realised over the expected average remaining service of the employees covered by the plan.
Treasury shares reduce the equity recognised in the balance sheet. Acquisition of treasury shares is shown as a change in equity. No gain or loss is recognised in the income statement for the sale, issue or cancellation of treasury shares. Consideration received is recognised in the financial statements as a change in equity. Provisions for currency translation are recognised for currency translation differences arising out of the consolidation of the financial statements of independent foreign subsidiaries or branches.
Currency translation differences from a monetary item which is essentially part of net investment by the company in an independent foreign entity, e.g. a long term loan, are recognised in equity in the consolidated financial statements up to the point of disposal or repayment.
Revenue from turnover and other operating income is only recognised when the service has been provided or the goods or products delivered, i.e. transfer of risk to the customer has taken place. Income from assets for which there is a buy-back agreement with a subsidiary is only recognised when the assets have finally left the group. Up to this point it is recognised in inventories. The cost of sales includes costs incurred to achieve sales and the cost of merchandise purchased and held for resale. This heading also includes the cost of transfers to provisions for warranty obligations. Distribution costs include labour and material costs and depreciation and amortisation for marketing, shipment, freight, advertising, sales promotion, market research and customer service costs. General administrative costs include labour and material costs and the depreciation and amortisation attributable to administration. Taxes such as land tax and vehicle tax are attributed to production, research and development, sales or administrative costs in accordance with the source of the costs.
Contingent liabilities are not recognised in the financial statements. They are shown in the notes except when the probability of an outflow of resources embodying economic benefits is very low. Contingent assets are not recognised in the financial statements. However, they are shown in the notes if the inflow of economic benefits is probable.
Events after the balance sheet date which provide additional information on conditions that existed at the balance sheet date (adjusting events after the balance sheet date) are included in the financial statements. Non-adjusting events after the balance sheet date are shown in the notes, if they are material.
In certain instances, preparing the annual financial statements requires exercises of discretion and estimates and assumptions about the amounts of receivables, liabilities and provisions, deferred taxes, contingent liabilities, impairment tests and recognised income and expenses.
These estimates may differ from the ultimate outturn. The most important assumptions and estimates in connection with the impairment test for goodwill are stated in Note 22, the assumptions and estimates in connection with recognising pension liabilities in Note 26, and the assumptions and estimates in connection with recognising deferred taxes in Note 12.
The International Accounting Standard Board (IASB) has published several changes to existing IFRSs as well as new IFRSs and Interpretations of the International Financial Reporting Interpretation Committee (IFRIC) which companies are required to apply to all financial years starting on or after 1 January 2008.
IFRIC Interpretation 11 was published in November 2006 and is applicable to financial years beginning on or after 1 March 2007. Under this interpretation, arrangements under which employees are granted rights to equity instruments of a company must be accounted for as share-based payment arrangements involving the company's equity instruments if the company buys the instruments from another party or the shareholders provide the equity instruments. As the companies included in the consolidated financial statements do not grant any share-based payments within the meaning of this interpretation, it has no effect on the consolidated financial statements.
IFRIC Interpretation 12 was published in November 2006 and is applicable to financial years beginning on or after 1 January 2008. The interpretation covers accounting for obligations under service concession arrangements and acquired rights in the operator's financial statements.
The companies included in the consolidation group are not operators within the meaning of IFRIC 12. This interpretation accordingly has no effect on the group.
In July 2007 the IFRIC published IFRIC 14 "IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction". This interpretation indicates how the limit is to be set under IAS 19 "Employee Benefits" for a surplus to be recognised as an asset. It further explains the effects on measurement of assets and provisions under defined benefits plans resulting from payment of minimum amounts based on a statutory or contractual obligation. This ensures that companies account consistently for surplus plan assets as assets. IFRIC 14 is mandatory for financial years beginning on or after 1 January 2008. As none of the group's defined benefit pension plans show surplus plan assets, this interpretation is not expected to have any impact on the group's assets, financial situation or earnings.
The IASB has also published other IFRSs and IFRICs which Leifheit has elected to apply from 2008, even though they are only mandatory from a later date.
The IASB published IFRS 8 "Operating Segments" on 30 November 2006. IFRS 8 replaces IAS 14 "Segment Reporting", which previously applied to segment reporting. With the exception of minor terminological changes, IFRS 8 adopts the wording of the corresponding US standard SFAS 131 "Disclosures about Segments of an Enterprise and Related Information" in full. IFRS 8 requires segment reporting to follow the "Management Approach", where the segment information reported corresponds to the company's internal reporting as used by management to take decisions. This standard has been applied since 1 January 2008 and has not had any effect on the group.
The IASB also published further IFRSs and IFRICs, although companies are not required to apply these until a later date. The following section lists the standards and interpretations and their likely relevance for the Leifheit Group. Early application of these standards is permitted. However, Leifheit has not so far made use of this option.
IFRIC Interpretation 13 was published in June 2007 and is applicable to financial years beginning on or after 1 July 2008. Customer loyalty awards granted to customers must be accounted for as turnover separately from the transaction in connection with which they were granted. Part of the fair value of the consideration received is accordingly allocated to the award credits and the recognition of revenue is deferred. Turnover is recognised in the periods in which the customer awards are exercised or lapse. As the group currently does not have any customer loyalty or bonus programmes, this interpretation is not expected to have any effect on the consolidated financial statements.
In January 2008 the IASB published an amendment to IFRS 2 which provides a more precise definition of vesting conditions and specifies the accounting treatment when a grant of equity instruments is cancelled. This amendment enters into force on 1 January 2009. It is not currently expected to have any impact on the group's assets, financial situation or earnings.
In March 2007 the IASB issued the revised standard IAS 23 "Borrowing Costs". This stipulated that borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are to be capitalised. The current option of recognising borrowing costs immediately in profit or loss is being abolished. The revised standard must be applied to financial years beginning on or after 1 January 2009. This change will only impact on any future acquisitions of assets.
In September 2007 the IASB published a revised version of IAS 1 "Presentation of Financial Statements", which is intended to facilitate analysis and comparison of financial statements by users of financial statements. Under the revised IAS 1 the presentation of group equity only shows changes in equity resulting from transactions with owners in their capacity as owners. All non-owner changes in equity recognised in profit or loss or otherwise are presented in a new element in the financial statements. This can either be presented in a single statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). The revised standard must be applied to financial years beginning on or after 1 January 2009, but can be applied earlier. The new standard will affect the presentation of the group's financial information, but not the recognition and measurement of assets and liabilities in the consolidated financial statements.
IFRS 3R Business Combinations and IAS 27R Consolidated and Separate Financial Statements: These revised standards were published in January 2008 and are applicable to financial years beginning on or after 1 July 2009. IFRS 3R introduces changes in the treatment of business combinations after this date which will impact the recognition of goodwill, profit for the period in which the combination took place as well as future profits. IAS 27R stipulates that changes in a parent's ownership interest in a subsidiary that do not result in the loss of control must be accounted for within equity.
Therefore a transaction of this kind will give rise neither to goodwill nor to a gain or loss. The standard also changes the rules applying to the allocation of losses to parent companies and minority interests and the treatment of transactions which lead to a loss of control. The revisions also amended IAS 7 Statement of Cash Flows, IAS 12 Income Taxes, IAS 21 The Effects of Changes in Foreign Exchange Rates, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures. The amendments to IFRS 3 and IAS 27 will impact future acquisitions and losses of control and transactions with minority interests.
IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements – Puttable Instruments and Obligations Arising on Liquidation. These amendments to IAS 32 and IAS 1 were published in February 2008 and are applicable to financial years beginning on or after 1 January 2009. The revisions permit some limited exceptions whereby puttable financial instruments can be classified as equity, provided they meet certain criteria. The revisions to these standards will not impact the group's assets, financial position or earnings, as the group has not issued any such instruments.
IAS 39 Financial Instruments: Recognition and Measurement – Qualifying Instruments: These amendments to IAS 39 were published in July 2008 and are applicable to financial years beginning on or after 1 July 2009. The amendment provides additional guidance on how the principles contained in IAS 39 on the designation of hedged items apply to the designation of a one-sided risk in a hedged item and the designation of inflation in a financial hedged item. The amendment clarifies that it is permissible to designate only part of the changes in fair value or fluctuations in cash flow of a financial instrument as a hedged item. This amendment will not impact the group's assets, financial position or earnings, as the group has not entered into any such transactions.
IAS 27 Consolidated and Separate Financial Statements: The amended IAS 27 was published in January 2008 and is applicable to reporting periods beginning on or after 1 July 2009. The amendments relate primarily to accounting for non-controlling interests (i.e. minority interests), which will in future share in any losses incurred by the group in full, and transactions which lead to a loss of control in a subsidiary, which will in future be recognised through profit or loss. By contrast the impact of the disposal of a shareholding which does not lead to a loss of control is accounted for as an equity transaction. The transitional arrangements do not stipulate retrospective application of the amendments. Therefore there will be no change for assets and liabilities deriving from such transactions before the first-time application of the new standard.
IAS 40 Investment Property: Property under construction or development for future use as an investment will be classified in future as an "investment property" and brought within the scope of IAS 40. If the fair value cannot be measured reliably, the property under construction is measured at cost until such time as the fair value can be determined or the construction is completed. The conditions for a voluntary change in the accounting and valuation methods are now the same as those in IAS 8. The amendment clarifies that the carrying amount of an investment property is equal to the fair value plus any related liabilities.
IFRIC Interpretation 16 was published in July 2008 and is applicable to financial years beginning on or after 1 October 2008. The interpretation is not to be applied retrospectively. IFRIC 16 issues guidance on hedges of a net investment in a foreign operation. The interpretation provides guidelines on the hedging of foreign currency risks arising from a net investment in a foreign operation, which entities within a group can hold the instruments hedging the net investment and how an entity should determine the amounts to be reclassified from equity to profit or loss for both the hedging instrument and the hedged item when the entity disposes of the investment. The group is currently assessing which reclassification method should be used in the event of the sale of a net investment.
The 2008 improvements to the International Financial Reporting Standards were published in May 2008 and with the exception of IFRS 5, which applies from 1 July 2009, are applicable to reporting periods beginning on or after 1 January 2009. These changes published as part of the improvement project include a large number both of material changes, which affect the accounting treatment, as well as purely editorial changes. The latter involves, for example, editing certain definitions and wordings to make them more consistent with other IFRSs. The group has not yet applied the following changes:
W IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations: The amendment clarifies that assets and liabilities of a subsidiary must be classified as held for sale if the parent is committed to a plan involving loss of control of the subsidiary, regardless of whether the entity will retain a non-controlling interest after the sale.
W IAS 23 Borrowing Costs: The definition of borrowing costs was revised to the extent of adopting the guidelines in IAS 39 on the effective interest rate.
W IAS 27 Consolidated and Separate Financial Statements: The amendment clarifies that a subsidiary accounted for at fair value in accordance with IAS 39 in the parent's separate financial statements should continue to be measured in accordance with IAS 39 when classified as held for sale.
W IAS 34 Interim Financial Reporting: Clarification that the diluted and undiluted earnings per share only need to be reported in the interim report if the company is subject to the provisions of IAS 33 Earnings per Share.
W IAS 36 Impairment of Assets: The amendment standardises the disclosures required when determining value in use and when discounted cash flows are used to estimate fair value less costs to sell.
The Group believes that the amendments from the improvement project will not have any significant impact on the financial statements.
On 1 July 2008 Leifheit AG acquired 60% of the voting shares in the unlisted Herby Industrie S.A. based in La Loupe, France, which specializes in the manufacture and distribution of non-electric laundry dryers, mainly in France. Herby Industrie S.A. has a whollyowned subsidiary, Tunifil S.A. based in Sousse, Tunisia. Due to the nature of the agreement with the vendor for the purchase of the remaining shares in Herby Industrie S.A., the purchase was accounted for in accordance with IFRS 3 as if 100% of the shares had been acquired on the purchase date of 1 July 2008.
In addition Leifheit AG took over the steam ironing business of Hailo in exchange for Leifheit's household ladders segment with effect from 31 December 2008. The steam ironing business consists mainly of the procurement and distribution of steam ironing boards and steam ironing stations.
As the two acquisitions are regarded individually as non-material, the following information is provided on a combined basis. The fair values of the identifiable assets and liabilities at the acquisition date and the corresponding fair values immediately before the acquisition date were as follows:
| € 000 | Fair value at acquisition date |
Previous book value |
|---|---|---|
| Cash | 217 | 217 |
| Receivables and other assets | 3,444 | 3,444 |
| Inventories | 1,434 | 1,341 |
| Tangible assets | 6,042 | 1,575 |
| 11,137 | 6,577 | |
| Liabilities | -2,783 | -2,783 |
| Deferred taxes | -1,520 | – |
| Provisions | -146 | -146 |
| -4,449 | -2,929 | |
| Net assets | 6,688 | 3,648 |
| Goodwill | 6,162 | |
| Acquisition cost | 12,850 |
€ 788,000 of the acquisition costs were attributable to incidental costs. The outlay of cash for the acquisitions in the reporting year was € 6.5 million. Equity instruments were not used to pay for the acquisitions.
The Herby Group generated turnover of € 10.5 million and EBIT of € 415,000 over the full year 2008. EBIT
in the post-acquisition period was € 453,000. The full-year turnover for the steam ironing business was approximately € 7 million. EBIT figures on an IFRS basis are not available.
The goodwill of € 6.2 million represents the expected synergies from the company acquisitions.
On 1 October 2008 Leifheit AG acquired 51% of the shares in the unlisted company Leifheit CZ a.s., based in Prague in the Czech Republic, which distributes Leifheit products in the Czech Republic and Slovakia. Due to the consent arrangements which have been agreed individually with the minority shareholder, Leifheit cannot determine the company's financial and operating policies on its own. Neither of the parties can exercise a controlling interest. The joint venture was accounted for using the equity method.
| 1 | TURNOVER | ||
|---|---|---|---|
| Turnover by region, € 000 | 2008 | 2007 | |
| Germany | 111,306 | 113,775 | |
| Europe (exc. Germany) | 153,182 | 147,680 | |
| Rest of the world | 15,293 | 14,667 | |
| 279,781 | 276,122 |
In the segment reporting, consolidated turnover is broken down between the Household Products and Bathroom Furnishings divisions.
| € 000 | 2008 | 2007 |
|---|---|---|
| Cost of raw materials, consumables and goods for resale | 121,990 | 122,989 |
| Cost of purchased services | 10,147 | 9,791 |
| 132,137 | 132,780 |
| € 000 | 2008 | 2007 |
|---|---|---|
| Tangible assets | ||
| Cost of sales | 3,898 | 3,476 |
| Research and development costs | 171 | 174 |
| Distribution costs | 1,938 | 2,416 |
| Administrative costs | 476 | 547 |
| 6,483 | 6,613 | |
| Intangible assets | ||
| Cost of sales | 200 | 142 |
| Research and development costs | 72 | 68 |
| Distribution costs | 922 | 724 |
| Administrative costs | 251 | 223 |
| 1,445 | 1,157 | |
| Total depreciation and amortisation | 7,928 | 7,770 |
| € 000 | 2008 | 2007 |
|---|---|---|
| Wages and salaries | 45,918 | 45,635 |
| Social security contributions and employee benefits | 10,298 | 10,176 |
| Expense on post-employment benefits | 991 | 963 |
| 57,207 | 56,774 |
Wages and salaries in the year under review include non-recurring expenses such as severance payments and collective bargaining increases.
| Employees (annual average) | 2008 | 2007 |
|---|---|---|
| Germany | 618 | 651 |
| Czech Republic | 424 | 404 |
| France | 202 | 142 |
| Switzerland | 152 | 148 |
| Other countries | 125 | 59 |
| 1,521 | 1,404 |
The growth in the average numbers employed in the group in 2008 reflected the first-time inclusion of 116 employees of the Herby Group and of 10 employees
at our Romanian subsidiary, which began operations in 2008.
| € 000 | 2008 | 2007 |
|---|---|---|
| Labour costs | 4,279 | 3,986 |
| Cost of materials | 248 | 250 |
| Depreciation and amortisation | 243 | 242 |
| Other research and development costs | 2,644 | 2,457 |
| 7,414 | 6,935 |
To enhance our innovation capacity and accelerate development projects, more staff were hired, particularly in the Household Products division.
| € 000 | 2008 | 2007 |
|---|---|---|
| Labour costs | 25,391 | 26,779 |
| Advertising costs | 16,930 | 14,275 |
| Outgoing freight | 16,143 | 16,841 |
| Commissions | 7,589 | 8,016 |
| Fees and bought-in services | 4,199 | 3,449 |
| Depreciation and amortisation | 2,860 | 3,140 |
| Cost of cars, travel and entertainment | 2,764 | 2,866 |
| Rent | 2,498 | 2,462 |
| Office and other overheads | 1,966 | 1,710 |
| Allowances on receivables | 1,333 | 881 |
| Maintenance | 754 | 1,135 |
| Payments to customers | 662 | 384 |
| General operating and administrative costs | 649 | 441 |
| Post and telephone costs | 530 | 565 |
| Insurance | 434 | 507 |
| Royalties | 340 | 395 |
| Other distribution costs | 2,103 | 2,081 |
| 87,145 | 85,927 |
| € 000 | 2008 | 2007 |
|---|---|---|
| Labour costs | 10,334 | 9,765 |
| Fees and bought-in services | 2,670 | 2,575 |
| Depreciation and amortisation | 727 | 770 |
| Cost of cars, travel and entertainment | 570 | 461 |
| Rent | 563 | 331 |
| Maintenance | 454 | 484 |
| Post and telephone costs | 392 | 430 |
| Office and other overheads | 246 | 304 |
| Insurance | 158 | 132 |
| General operating and administrative costs | 133 | 186 |
| Other administrative costs | 1,381 | 1,731 |
| 17,628 | 17,169 |
2,394 2,578
| € 000 | 2008 | 2007 |
|---|---|---|
| Spirella S.A. anniversary celebrations | 203 | – |
| Costs of payment transactions | 171 | 248 |
| Losses on disposals of assets | 115 | 1,131 |
| Expenses for relocation of shipment | -270 | 2,205 |
| Other operating income (less than € 100,000) | 525 | 409 |
| 744 | 3,993 |
€ 000 2008 2007 Income from disposal of assets 531 1,354 Dissolution of Spirella S.A. provident fund 303 – Customs refund 221 – Royalties 213 248 Other operating income (less than € 100,000) 1,126 976
| € 000 | 2008 | 2007 |
|---|---|---|
| Changes in the fair value of forward foreign exchange transactions | 81 | -458 |
| Upward revaluation due to foreign currency valuation | 801 | 469 |
| Downward revaluation due to foreign currency valuation | -677 | -520 |
| Realised exchange rate gains | 4,449 | 1,624 |
| Realised exchange rate losses | -4,445 | -2,373 |
| 209 | -1,258 |
| Interest income € 000 | 2008 | 2007 |
|---|---|---|
| Interest income from interest on receivables | 125 | 254 |
| Interest income on financial instruments | 556 | 114 |
| 681 | 368 |
| Interest expense € 000 | 2008 | 2007 |
|---|---|---|
| Interest expense on interest on pension obligations | -2,254 | -2,073 |
| Interest expense on financial instruments | -982 | -165 |
| -3,236 | -2,238 |
Interest income from financial instruments relates to interest income on deposits with credit institutions,
and interest expense on financial instruments from interest expense on current account loans.
| € 000 | 2008 | 2007 |
|---|---|---|
| Corporation tax (Germany) | 7 | -107 |
| Municipal trade tax (Germany) | 55 | – |
| Foreign income taxes | -2,429 | -2,106 |
| Deferred tax on income | 149 | -1,467 |
| -2,218 | -3,680 |
The tax rate for Leifheit AG for corporation tax and municipal trade tax in Germany was 28.0% in the year under review (2007: 37.3%).
The theoretical income tax liability that would result from applying the tax rate applicable in the parent
company's domicile is as follows:
| € 000 | 2008 | 2007 |
|---|---|---|
| EBT | 2,662 | 484 |
| Taxes assuming the tax rate applicable to the parent company | -745 | -180 |
| Reversal of impairment of deferred tax assets from loss carryforwards | – | 1,277 |
| Taxes in earlier years | 99 | 8 |
| Different foreign tax rates | -32 | -160 |
| Adjustment of rate for deferred tax assets from earlier years | -441 | -535 |
| Non tax-deductible losses of group companies | -1,274 | -540 |
| Revaluation of deferred taxes due to changes in tax rate | 259 | -1,606 |
| Reduction in tax loss carryforwards due to a write-up for tax purposes | – | -1,685 |
| Others | -84 | -259 |
| Tax liability | -2,218 | -3,680 |
| € 000 | 2008 | 2007 |
|---|---|---|
| Income tax for other periods | 99 | 8 |
| Deferred taxes due to differences in timing and tax loss carryforwards | 149 | -920 |
| Current tax expense | -2,466 | -2,221 |
| Other valuations for deferred tax | – | -547 |
| Tax liability | -2,218 | -3,680 |
Deferred taxes are recognised for all material temporary differences between the tax base and the carrying amount. The deferred taxes have the following breakdown:
| € 000 | 31.12.2008 | 31.12.2007 | ||
|---|---|---|---|---|
| Deferred tax assets |
Deferred tax liabilities |
Deferred tax assets |
Deferred tax liabilities |
|
| Different depreciation or amortisation periods of noncurrent assets |
129 | 3,305 | 100 | 3,297 |
| Valuation of inventories | 413 | 1,822 | 323 | 489 |
| Valuation of foreign currency receivables | 124 | 819 | 354 | 785 |
| Valuation of pensions | 2,838 | – | 2,658 | – |
| Valuation of provisions for part-time working by older employees |
157 | – | 181 | – |
| Different recognition rules for other provisions | 334 | – | 339 | 120 |
| Valuation of foreign currency liabilities | 434 | – | 144 | 9 |
| Other timing differences | 131 | 118 | 106 | – |
| Tax loss carryforwards | 1,938 | – | 2,708 | – |
| Gross value | 6,498 | 6,064 | 6,913 | 4,700 |
| Offset | -2,312 | -2,312 | -2,279 | -2,279 |
| Consolidation | 773 | -639 | 1,170 | 84 |
| Balance sheet amounts | 4,959 | 3,113 | 5,804 | 2,505 |
Deferred tax assets are only recognised if their realisation is expected within a five-year period. No deferred tax assets were recognised on corporation tax loss carryforwards of € 29.2 million (2007: € 23.1 million) and on municipal trade tax loss carryforwards of € 32.1 million (2007: € 26.4 million), because it is not sufficiently probable that Leifheit will be able to make use of these loss carryforwards over the next five years.
Minority interests relate to the interests held in Leifheit Distribution S.R.L. by a minority shareholder in the financial year 2008. There were no minority interests in 2007.
Earnings per share are calculated by dividing the share in net profit or loss of the shareholders of Leifheit AG by the weighted average number of shares in circulation during the financial year. No financial or compensation instruments were used which would lead to a dilution of the earnings per share.
| 2008 | 2007 | ||
|---|---|---|---|
| Shares issued | Shares 000 | 5,000 | 5,000 |
| Weighted average number of treasury shares | Shares 000 | 240 | 240 |
| Weighted average number of shares | Shares 000 | 4,760 | 4,760 |
| 2008 | 2007 | ||
|---|---|---|---|
| Net result attributable to parent company shareholders | € 000 | 419 | -3,196 |
| Weighted average number of shares | Shares 000 | 4,760 | 4,760 |
| Earnings per share (diluted and undiluted) | € | 0.09 | -0.67 |
| € 000 | 31.12.2008 | 31.12.2007 |
|---|---|---|
| Balances with banks, cash on hand | 6,208 | 5,438 |
| Payables to banks due at any time | – | 4,700 |
| 6,208 | 10,138 |
CASH AND CASH EQUIVALENTS 15
| € 000 | 31.12.2008 | 31.12.2007 |
|---|---|---|
| Trade accounts receivable | 65,717 | 56,750 |
| Trade bills | 4,360 | 6,551 |
| 70,077 | 63,301 |
At the balance sheet date € 27.9 million of the receivables were insured via credit insurance or export credit guarantees from the German federal government.
As at 31 December 2008 trade receivables with a nominal value of € 4.5 million (2007: € 3.6 million) were impaired.
The changes in impairment are shown below:
| € 000 | |
|---|---|
| Balance as at 1.1.2007 | 2,434 |
| Exchange rate differences | -6 |
| Additions | 2,861 |
| Use | 1,628 |
| Release | 91 |
| Balance as at 31.12.2007 | 3,570 |
| Exchange rate differences | 12 |
| Additions | 3,108 |
| Use | 1,750 |
| Release | 426 |
| Balance as at 31.12.2008 | 4,514 |
The additions relate partly to unexplained deductions from invoices, which reduce the group's turnover.
31 December 2008 is as follows:
| € 000 | |
|---|---|
| Neither overdue nor impaired | 53,944 |
| Overdue, but not impaired | |
| 1 to 30 days | 7,139 |
| 31 to 60 days | 1,009 |
| 61 to 90 days | 591 |
| 91 to 120 days | 177 |
| Over 120 days | 441 |
| Balance as at 31.12.2007 | 63,301 |
| Neither overdue nor impaired | 59,972 |
| Overdue, but not impaired | |
| 1 to 30 days | 7,287 |
| 31 to 60 days | 1,542 |
| 61 to 90 days | 395 |
| 91 to 120 days | 271 |
| Over 120 days | 610 |
| Balance as at 31.12.2008 | 70,077 |
In contrast to the 2007 annual financial report the trade receivables neither overdue nor impaired include trade bills. The figures for 2007 have been restated accordingly.
| € 000 | 31.12.2008 | 31.12.2007 |
|---|---|---|
| Raw materials, consumables and supplies | 8,322 | 8,177 |
| Unfinished products and services | 2,381 | 2,188 |
| Finished products and goods purchased and held for resale | 48,766 | 42,281 |
| Payments on account | 1,831 | 1,076 |
| 61,300 | 53,722 |
| € 000 | 31.12.2008 | 31.12.2007 |
|---|---|---|
| Raw materials, consumables and supplies measured at fair value | 543 | 635 |
| Raw materials, consumables and supplies not written down | 7,779 | 7,542 |
| Total raw materials, consumables and supplies | 8,322 | 8,177 |
| Work in progress measured at fair value | 345 | 155 |
| Work in progress not written down | 2,036 | 2,033 |
| Total work in progress | 2,381 | 2,188 |
| Finished products measured at fair value | 9,855 | 8,270 |
| Finished products not written down | 38,911 | 34,011 |
| Total finished products and merchandise | 48,766 | 42,281 |
| € 000 | 31.12.2008 | 31.12.2007 |
|---|---|---|
| VAT receivables | 1,557 | 2,065 |
| Current prepayments and accrued income | 667 | 890 |
| Balances in favour with our creditors | 546 | 298 |
| Receivables from costs passed on | 188 | 97 |
| Receivables from royalties | 15 | 130 |
| Receivables from the disposal of fixed assets | – | 3,320 |
| Ancillary purchasing costs of projects | – | 127 |
| Receivables from supplier discounts passed on | – | 115 |
| Other current assets (less than € 100,000) | 400 | 367 |
| 3,373 | 7,409 |
| Other | |||
|---|---|---|---|
| € 000 | Investments | financial assets |
Total |
| Cost as at 1.1 2007 | 1,249 | 441 | 1,690 |
| Additions | – | 33 | 33 |
| Disposals | – | 43 | 43 |
| Balance as at 31.12.2007 | 1,249 | 431 | 1,680 |
| Additions | – | – | – |
| Additions from initial consolidation | – | – | – |
| Disposals | – | 7 | 7 |
| Balance as at 31.12.2008 | 1,249 | 424 | 1,673 |
| Cumulative depreciation as at 1.1.2007 | 1,074 | 32 | 1,106 |
| Additions | – | – | – |
| Disposals | – | 32 | 32 |
| Balance as at 31.12.2007 | 1,074 | – | 1,074 |
| Additions | – | – | – |
| Additions from initial consolidation | – | – | – |
| Disposals | – | – | – |
| Balance as at 31.12.2008 | 1,074 | – | 1,074 |
| Other | |||
| Total | |||
| Net book value 31.12.2007 | 175 | 431 | 606 |
| Net book value 31.12.2008 | 175 | 424 | 599 |
| € 000 | Investments | financial assets |
| € 000 | Total |
|---|---|
| Cost as at 1.10.2008 | – |
| Additions | 1,142 |
| Disposals | 234 |
| Balance as at 31.12.2008 | 908 |
With total assets of € 5,068,000, of which € 1,258,000 were noncurrent assets, and total liabilities of € 4,307,000, of which € 4,046,000 were noncurrent, the net assets of Leifheit CZ a.s. were € 761,000.
| € 000 | Land and buildings |
Plant and machinery |
Other fixtures and fittings, tools and equipment |
Assets under construction |
Total |
|---|---|---|---|---|---|
| Cost as at 01.01.07 |
69,128 | 52,591 | 60,030 | 476 | 182,225 |
| Foreign currency differences | 21 | 142 | -180 | 2 | -15 |
| Additions | 1,521 | 94 | 3,356 | 2,401 | 7,372 |
| Disposals | 8,087 | 7,445 | 10,231 | – | 25,763 |
| Reclassification | 271 | 697 | 652 | -1,653 | -33 |
| Balance as at 31.12.2007 | 62,854 | 46,079 | 53,627 | 1,226 | 163,786 |
| Foreign currency differences | 974 | 533 | 524 | – | 2,031 |
| Additions | 232 | 378 | 2,667 | 1,757 | 5,034 |
| Additions from initial consolidation | 2,958 | 2,814 | 166 | 4 | 5,942 |
| Disposals | 17 | 4,979 | 4,072 | 52 | 9,120 |
| Reclassification | 321 | 491 | 616 | -1,744 | -316 |
| Balance as at 31.12.2008 | 67,322 | 45,316 | 53,528 | 1,191 | 167,357 |
| Cumulative depreciation as at 1.1.2007 |
34,814 | 46,012 | 51,481 | 28 | 132,335 |
| Foreign currency differences | -83 | 46 | -151 | 1 | -187 |
| Additions | 1,877 | 1,324 | 3,409 | 3 | 6,613 |
| Disposals | 5,190 | 6,550 | 9,639 | – | 21,379 |
| Reclassification | 131 | -138 | 7 | – | – |
| Balance as at 31.12.2007 | 31,549 | 40,694 | 45,107 | 32 | 117,382 |
| Foreign currency differences | 514 | 471 | 389 | – | 1,374 |
| Additions | 1,734 | 1,572 | 3,197 | -20 | 6,483 |
| Additions from initial consolidation | 855 | 2,066 | 127 | – | 3,048 |
| Disposals | 17 | 4,879 | 3,789 | 12 | 8,697 |
| Reclassification | – | – | – | – | – |
| Balance as at 31.12.2008 | 34,635 | 39,924 | 45,031 | – | 119,590 |
| € 000 | Land and buildings |
Plant and machinery |
Other fixtures and fittings, tools and equipment |
Assets under construction |
Total |
| Net book value 31.12.2007 | 31,305 | 5,385 | 8,520 | 1,194 | 46,404 |
| Net book value 31.12.2008 | 32,687 | 5,392 | 8,497 | 1,191 | 47,767 |
| € 000 | Brands | Goodwill | Other intangi ble assets |
Total |
|---|---|---|---|---|
| Cost | ||||
| as at 01.01.2007 | 7,210 | 3,299 | 15,231 | 25,740 |
| Foreign currency differences | – | – | -42 | -42 |
| Additions | – | – | 374 | 374 |
| Disposals | – | – | 1,226 | 1,226 |
| Reclassification | – | – | 33 | 33 |
| Balance as at 31.12.2007 | 7,210 | 3,299 | 14,370 | 24,879 |
| Foreign currency differences | – | – | 105 | 105 |
| Additions | – | 1,209 | 403 | 1,612 |
| Additions from initial consolidation | 41 | 4,953 | 2,839 | 7,833 |
| Disposals | – | – | 792 | 792 |
| Reclassification | – | – | 316 | 316 |
| Balance as at 31.12.2008 | 7,251 | 9,461 | 17,241 | 33,953 |
| Cumulative depreciation as at 1.1.2007 |
2,407 | – | 10,738 | 13,145 |
| Foreign currency differences | – | – | -37 | -37 |
| Additions | – | – | 1,157 | 1,157 |
| Disposals | – | – | 1,223 | 1,223 |
| Reclassification | – | – | – | – |
| Balance as at 31.12.2007 | 2,407 | – | 10,635 | 13,042 |
| Foreign currency differences | – | – | 89 | 89 |
| Additions | 1 | – | 1,444 | 1,445 |
| Additions from initial consolidation | 34 | – | 108 | 142 |
| Disposals | – | – | 791 | 791 |
| Reclassification | – | – | – | – |
| Balance as at 31.12.2008 | 2,442 | – | 11,485 | 13,927 |
| € 000 | Brands | Goodwill | Other intangi ble assets |
Total |
| Net book value 31.12.2007 | 4,803 | 3,299 | 3,735 | 11,837 |
| Net book value 31.12.2008 | 4,809 | 9,461 | 5,756 | 20,026 |
The additions to goodwill relate to the takeover of the Herby Group on 1 July 2008 and the takeover of the steam ironing business on 31 December 2008.
Goodwill and brand names acquired in business combinations were attributed to the following cash-generating units for the purposes of impairment tests:
The cash-generating units are based on internal management reporting. The Soehnle brand is capitalised within the cash-generating unit "Leifheit/Oetker/ Soehnle" and was acquired as part of the acquisition of the Soehnle group in 2001. The goodwill of the steam ironing segment was determined at 31 December 2008 and so was not subject to an impairment test.
The recoverable amount for each cash-generating unit is determined on the basis of the higher of value in use and fair value less cost to sell based on cash flow forecasts. Assumptions are made for future trends in turnover and costs on the basis of the 2009 budget, which is forecast for five years, and compared with external information. For Birambeau and Herby, a constant pattern of turnover and costs was assumed. The discount rates used for the cash flow forecasts to determine the value in use and the fair value less costs to sell vary due to the differing capital structure and tax position of each segment. They are based on average capital costs of 6.8% (2007: 8.5%) at the date of the impairment test, a risk-free interest rate of 4.8%, a market risk premium of 5.0% and a beta factor of 1.0, borrowing costs of 4.1% and a discount rate of 6.0% for the pension obligations. A growth rate of 1% was assumed.
As at 30 September 2008 the recoverable amounts calculated in this way were greater than the book values. The impairment tests therefore did not indicate a need to recognise impairment losses.
| Goodwill | Brand rights | |||
|---|---|---|---|---|
| Book value at reporting date | 2008 | 2007 | 2008 | 2007 |
| Birambeau | 3,299 | 3,299 | – | – |
| Herby | 4,953 | – | – | – |
| Leifheit/Oetker/Soehnle | – | – | 4,803 | 4,803 |
In accordance with IAS 36.12 (d) an impairment test for assets must be carried out if the book value of the net assets is greater than the market capitalisation. As a result, the intangible assets with finite useful lives and the tangible assets have undergone an impairment test. The assets were allocated to following cash-generating units:
Other noncurrent assets include the noncurrent part of a Leifheit AG corporation tax credit.
As a result of the amendment to section 37 of the Corporation Tax Act in the "Gesetz über steuerliche Begleitmassnahmen zur Einführung der Europäischen Gesellschaft und zur Änderung weiterer steuerlicher Vorschriften" SEStEG (Act on tax measures accompanying the introduction of the Societas Europaea and amending other tax regulations), the corporation tax credit was capitalised in 2006. This credit relates to retained earnings which were subject The assumptions for turnover and costs, the growth rate and the discount rates are the same as for the impairment test for goodwill and intangible assets with indefinite useful lives.
As at 30 September 2008 the recoverable amounts calculated in this way were greater than the book values. The impairment tests therefore did not indicate a need to recognise impairment losses.
to taxes on retained earnings for the years before 2001 under the old corporation tax system, and which have been subject since 2001 to corporation tax at the prevailing rate of 25% or the alternative dividend tax for old retained earnings at the old rate of 30%. This credit will be paid out by the tax authorities between 2008 and 2017 in equal instalments irrespective of the dividend (€ 792,000 annually). The present value of the credit at 31 December 2008 was € 5,940,000 (of which € 792,000 current and € 5,148,000 noncurrent)
| Remaining term up to 1 year, € 000 | 31.12.2008 | 31.12.2007 |
|---|---|---|
| Trade payables | 17,264 | 17,505 |
| Employees | 10,023 | 10,164 |
| Customer discounts | 8,372 | 8,460 |
| Advertising cost subsidies | 4,215 | 6,017 |
| Outstanding invoices | 2,214 | 2,465 |
| Other taxes (excluding income taxes) | 1,851 | 1,683 |
| Social security contributions | 1,151 | 1,096 |
| Amounts owed to debtors | 1,052 | 1,159 |
| Customer payment discounts | 962 | 1,048 |
| Commission due | 458 | 428 |
| External annual financial statement costs | 366 | 368 |
| Commitments to purchase | 350 | 359 |
| Severance payments to sales representatives | 300 | 171 |
| Tax advice | 179 | 167 |
| Insurance premia | 175 | 137 |
| Other payables (less than € 100,000) | 3,161 | 2,625 |
| 52,093 | 53,852 |
Payables to employees relate specifically to December wages paid in January and bonuses and severance payments.
| € 000 | 31.12.2008 | 31.12.2007 | ||||
|---|---|---|---|---|---|---|
| Total | of which current |
of which noncurrent |
Total | of which current |
of which noncurrent |
|
| Warranties | 4,060 | 3,139 | 921 | 3,553 | 2,784 | 769 |
| Personnel-related | 2,417 | – | 2,417 | 2,686 | – | 2,686 |
| Threatening losses | 413 | 413 | – | 238 | 157 | 81 |
| Other provisions | 1,431 | 1,287 | 144 | 1,396 | 1,252 | 144 |
| 8,321 | 4,839 | 3,482 | 7,873 | 4,193 | 3,680 |
| € 000 | 1.1.2008 | Ex change rate differ ences |
Use | Release | Additions | Additions from initial consoli dation |
31.12.2008 |
|---|---|---|---|---|---|---|---|
| Current provisions | |||||||
| Warranties | 2,784 | 12 | 2,547 | 5 | 2,895 | – | 3,139 |
| Threatening losses | 157 | – | 48 | – | 304 | – | 413 |
| Other current provisions | 1,252 | 1 | 762 | 326 | 1,122 | – | 1,287 |
| 4,193 | 13 | 3,357 | 331 | 4,321 | – | 4,839 | |
| Noncurrent provisions | |||||||
| Warranties | 769 | – | 25 | – | 31 | 146 | 921 |
| Personnel-related | 2,686 | – | 584 | – | 315 | – | 2,417 |
| Threatening losses | 81 | – | 81 | – | – | – | – |
| Other noncurrent provisions | 144 | – | 12 | – | 12 | – | 144 |
| 3,680 | – | 702 | – | 358 | 146 | 3,482 |
Provisions for warranties are formed for future repair work, supplies of replacement products and compensation payments deriving from legal or statutory warranties.
Personnel-related provisions are formed for longservice bonuses, obligations relating to part-time working for older employees and for statutory obligations to staff in Austria. Provisions for threatening losses relate primarily to purchase commitments. Other provisions mainly contain liabilities for legal fees as well as other liabilities relating to the disposal of tangible assets.
There are various defined benefit pension plans in the Leifheit Group. Provisions for pension obligations have been recognised for future obligations to pay retirement and survivor benefits.
In line with normal practice in Germany, the pension plans at Leifheit AG and Kleine Wolke Textilgesellschaft mbH & Co. KG are not backed by pension funds or financed from plan assets, with the exception of the deferred compensation plans. The pension plans at Spirella s.a. in Switzerland are entirely financed by plan assets.
The following table shows the changes in pension obligations in the relevant reporting periods:
| € 000 | 31.12.2008 | 31.12.2007 |
|---|---|---|
| Present value of defined benefit obligations (DBO) | 57,564 | 55,421 |
| Plan assets at fair value | -14,353 | -12,164 |
| Actuarial losses not yet recognised | -557 | -1,451 |
| Recognised net debt from pension obligations in Germany and Switzerland | 42,654 | 41,806 |
| Pension obligations, France | 487 | 522 |
| Employee benefit obligations | 43,141 | 42,328 |
The expense for post-employment benefits in Germany and Switzerland shows the following breakdown:
| € 000 | 31.12.2008 | 31.12.2007 |
|---|---|---|
| Current service expense | 1,539 | 1,402 |
| Interest expense on the obligation | 2,727 | 2,461 |
| Recognised actuarial net gains / losses | -3 | 228 |
| Expected income from plan assets | -473 | -388 |
| Employee contributions | -495 | -420 |
| Past service costs | – | -674 |
| Total expense of post-employment benefits | 3,295 | 2,609 |
The following changes in the net pension liability in Germany and Switzerland were recognised in the balance sheet:
| € 000 | 2008 | 2007 |
|---|---|---|
| Net debt at start of year | 41,806 | 41,540 |
| Currency effects | 152 | – |
| Net expense recognised in the income statement | 3,295 | 2,609 |
| Contributions | -788 | -641 |
| Payments to benefit recipients | -1,811 | -1,702 |
| Net debt at end of year | 42,654 | 41,806 |
The present value of defined benefit obligations (DBO) not funded by plan assets changed as follows:
| € 000 | 2008 | 2007 |
|---|---|---|
| DBO at start of year | 55,421 | 59,159 |
| Currency effects | 1,432 | – |
| Current service expense | 1,539 | 1,402 |
| Interest expense | 2,727 | 2,461 |
| Benefit payments | -2,983 | -2,879 |
| Actuarial losses | -887 | -4,976 |
| Adjustment for past costs | – | -674 |
| Other contributions | 315 | 928 |
| DBO at end of year | 57,564 | 55,421 |
The fair value of plan assets changed as follows:
| € 000 | 2008 | 2007 |
|---|---|---|
| Present value of plan assets at start of year | 12,164 | 10,984 |
| Currency effects | 1,280 | – |
| Expected income on plan assets | 473 | 388 |
| Losses or gains from plan assets | 213 | -1 |
| Transfers to plan assets | 63 | 58 |
| Employee contributions | 495 | 420 |
| Employer contributions | 725 | 583 |
| Other contributions | 315 | 927 |
| Benefits paid | -1,172 | -1,176 |
| Actuarial losses | -203 | -19 |
| Present value of plan assets at end of year | 14,353 | 12,164 |
Over the past five years the present value of defined benefit obligations (DBO) and the fair value of income from the plan have changed as follows:
| € 000 | 2008 | 2007 | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|
| DBO at balance sheet date | 57,564 | 55,421 | 47,395 | 48,182 | 41,168 |
| Plan assets at balance sheet date | 14,353 | 12,164 | 815 | 815 | – |
| Deficit in the plan | 43,211 | 43,257 | 46,580 | 47,367 | 41,168 |
| Experience-based adjustment to plan liabilities |
-1,026 | 482 | -406 | 5,182 | 2,129 |
| Experience-based adjustment to plan assets |
-418 | -14 | – | – | – |
The actuarial assumptions used as the basis for measuring obligations under post-employment
benefit plans were as follows at 31 December:
| % rate, German companies | 2008 | 2007 |
|---|---|---|
| Discount rate | 6.0 | 5.4 |
| Expected income from plan assets | 4.0 | 4.0 |
| Future trend in incomes | 2.5 | 2.5 |
| Future trend in pensions | 2.0 | 1.5 |
| Rate of staff turnover | 3.0 | 3.0 |
| Basis for calculation: "Richttafeln Prof. K. Heubeck", actuarial tables | 2005 G | 2005 G |
| Arithmetical final age | RVAGAnpG 2007 |
RVAGAnpG 2007 |
| % rate, Swiss companies | 2008 | 2007 |
|---|---|---|
| Discount rate | 4.0 | 3.5 |
| Long-term interest rate on plan assets | 3.5 | 3.0 |
| Future trend in incomes | 2.0 | 2.0 |
| Future trend in pensions | 0.5 | – |
| Rate of staff turnover | BVG 2005 | BVG 2000 |
Other long-term debt includes the liability for payment of the purchase price to acquire the remaining shares of the Herby Group of € 4.6 million (due within one to five years), a loan of € 161,000 (due within one to five years) and liabilities from payments received for purchase and delivery commitments. € 267,000 of this is expected to be recognised through profit or loss within the next one to five years and the remaining € 169,000 within five to ten years.
The subscribed capital of Leifheit AG totals € 15,000,000 (2007: € 15,000,000) denominated in euro and divided into 5,000,000 no-par bearer shares. The shares are documented as follows:
220,000 single share certificates for 1 share 63,000 collective share certificates for 10 shares 83,000 collective share certificates for 50 shares By resolution of the AGM on 24 May 2006, the Board of Management was authorised to increase the registered share capital with the consent of the Supervisory Board by a total of up to € 7,500,000 by 1 May 2011 through one or more issues of new no-par bearer shares for cash and/or in-kind contributions.
The capital surplus of € 16,934,000 (2007: € 16,934,000) represents the premium on the capital increase in autumn 1989.
The appropriated surplus includes the statutory reserve of € 1,036,000, other appropriated surplus of € 72,913,000 and the net profit for the year attributable to parent company shareholders of € 419,000. The other appropriated surplus contains the portion of consolidated profit earned in past years which was not distributed to shareholders. The translation reserve contains the exchange differences arising from the consolidation of equity as well as exchange differences from the conversion on the balance sheet date of financial statements not in the group's reporting currency included in the consolidated financial statements.
The outstanding minority interests comprise 49% of the equity of Leifheit Distribution S.R.L., Romania.
The Leifheit AG dividend (ISIN DE 0006464506) is based on the net profit shown in the Leifheit AG financial statements drawn up in accordance with German GAAP.
The Leifheit AG net profit for the 2008 financial year amounts to € 13,000,000. Leifheit AG holds 250,154 treasury shares, which are not eligible to receive dividends. The number of shares eligible to receive dividends may change by the time of the AGM. In the event of a change in the number of shares, the distribution of € 0.60 per share eligible to receive dividends will be maintained and a proposal to adjust
the appropriation of earnings accordingly will be put before the AGM.
The Board of Management and Supervisory Board propose the following resolution: A dividend of € 0.60 per no-par-value share eligible to receive dividends, a total of 4,749,845 no-par-value shares, representing a total distribution of € 2,849,907.60 will be distributed to shareholders out of the net profit for the 2008 financial year of € 13,000,000. The remaining amount of € 10,150,092.40 will be carried forward to the new account.
The material financial liabilities in the group – with the exception of derivatives – comprise current account credits and trade payables. The group has various financial assets, primarily trade receivables, other receivables, cash and cash equivalents and deposits repayable at short notice.
The material risks to the group arising out of the financial instruments are credit, liquidity and foreign currency risks. Management determines strategies and methods for managing the individual types of risk, which are described below.
W Currency risks
The group is exposed to foreign currency risks from purchases and sales in a currency other than the functional currency of the relevant group operating unit.
Around 24% of consolidated turnover and 36% of costs are in foreign currencies.
The following table shows the sensitivity of consolidated earnings before tax and equity to possible changes in the exchange rate of the US dollar, Swiss franc and Czech koruna based on reasonable assumptions. All other variables are assumed to be unchanged.
| Currency performance as at 31.12.2008 |
Effects on EBT in € 000 |
Effects on equity in € 000 |
|
|---|---|---|---|
| USD | + 5% | -839 | -839 |
| - 5% | 927 | 927 | |
| + 10% | -1,601 | -1,601 | |
| - 10% | 1,957 | 1,957 | |
| CHF | + 5% | 4 | -316 |
| - 5% | -5 | 349 | |
| + 10% | 8 | -604 | |
| - 10% | -10 | 738 | |
| CZK | + 5% | 73 | -429 |
| - 5% | -80 | 475 | |
| + 10% | 139 | -820 | |
| - 10% | -170 | 1,002 | |
The group also holds derivatives. These consist primarily of forward foreign exchange contracts. The goal of these derivatives is to hedge against currency risk arising out of the group's operations.
In line with internal guidelines, there was no trading in derivatives in 2008 and 2007, nor will there be in future. As at 31 December 2008 there were forward foreign exchange futures contracts with a nominal value of USD 26.0 million and CHF 0.3 million.
The group constantly monitors the risk of any shortterm liquidity bottlenecks using a liquidity planning instrument. This takes into account the maturities of the financial assets (e. g. receivables, other financial assets) and the maturities of the financial liabilities and expected cash flows from operations.
The group's goal is to strike a balance between continuous cover for the finance needed and ensuring flexibility by using deposits and current account credits.
The interest rate risk to the Leifheit Group consists primarily of changes in the interest rates used to discount pension obligations and similar liabilities as well as the short-term money market interest rates for current account credits. The group only uses short-term current account lines. There are no long-term interest-bearing bank loans or similar interest-bearing financial liabilities.
The group does business exclusively with creditworthy parties. Credit enquiries are made for all major customers wishing to do business with Leifheit. Balances of receivables are continuously monitored. Credit insurance has been taken out for selected customers.
For other financial assets, such as cash and cash equivalents, the maximum credit risk from counterparty default is the carrying amount of the instruments.
The following table shows the book values and fair values of the main financial instruments in the consolidated financial statements:
| Book value IAS 39 |
Fair value | ||||
|---|---|---|---|---|---|
| € 000 | category | 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 |
| Financial assets | |||||
| Cash and cash equivalents | a) | 6,208 | 10,138 | 6,208 | 10,138 |
| Trade receivables | a) | 70,077 | 63,301 | 70,077 | 63,301 |
| Other financial assets | a) | 1,149 | 4,327 | 1,149 | 4,327 |
| Financial liabilities | |||||
| Current account credits | b) | 7,672 | – | 7,672 | – |
| Trade payables | b) | 17,264 | 17,505 | 17,264 | 17,505 |
| Derivative financial liabilities | c) | 532 | 888 | 532 | 888 |
| Other financial liabilities | b) | 22,270 | 23,743 | 22,270 | 23,743 |
a) Loans and receivables
b) Financial liabilities measured at amortised cost
c) Financial liabilities held for trading
The book values of the derivative financial liabilities are equal to their fair values. The other book values are all equal to amortised cost.
The breakdown by division corresponds to the internal reporting structure and covers the two divisions Household Products and Bathroom Furnishings. The Household Products division develops, produces and markets household goods and appliances under the Leifheit, Dr. Oetker Bakeware, Birambeau and Herby brands as well as scales under the Soehnle brand. The Bathroom Furnishings division brings together the activities under the Spirella, Kleine Wolke and Meusch brands (bathroom mats, textiles and accessories).
Segment data is calculated as follows:
W The geographical regions relevant for Leifheit are Germany, Europe excluding Germany and the rest of the world.
Group companies did not enter into any contingent liabilities.
There are leasing agreements for business premises, IT and telephone equipment, vehicles and similar assets and licensing agreements with annual expense of around € 3.0 million. These obligations total approximately € 4.7 million during the non-cancellable remaining terms until 2013. As at 31 December 2008 there were purchase commitments totalling € 0.8 million. The leasing agreements constitute operating leases within the meaning of IAS 17.
There are obligations under agreements for the purchase of tangible assets totalling € 1.1 million (2007: € 0.9 million) for tools and vehicles.
In addition, there are payment obligations from forward foreign exchange contracts for currency hedging totalling € 19.1 million, compared with contractual payment receivables of USD 26.0 million (nominal value, corresponds to €18.6 million on the balance sheet date), as well as forward foreign exchange contracts for currency hedging of € 0.2 million (equivalent to CHF 0.3 million), whose fair value at the balance sheet date is CHF 0.3 million.
Remuneration of the Board of Management for activities in subsidiaries in the reporting year amounted to € 331,000 (2007: € 248,000).
Remuneration of the Board of Management totalled € 1,233,000 (2007: € 875,000), of which variable compensation represented € 251,000 (2007: € 73,000). Transfers to pension reserves (DBO under IFRS) for members of the Board of Management amounted to € 218,000 (2007: € 344,000). Remuneration of the Supervisory Board totalled € 140,000 (2007: € 140,000)
The company granted one of the members of its Board of Management a share-based payment component from September 2007. This is an instrument which provides for payment in cash rather than shares. Bonus payments are conditional on the Leifheit AG share price reaching at least € 25.00.
If all conditions are met and the option is exercised by the beneficiary, a payment of € 500 will be made for each of the 1,000 bonus units granted. The amount per bonus unit increases by € 100 for each full euro by which the share price exceeds € 25.00. Half the bonus units can be exercised after a vesting period of two years, the second half after a threeyear vesting period, up to a final date of 17 November 2010. The value of the bonus programme is limited to € 2.5 million. Provision is made for the obligation under this agreement prorated over the relevant qualifying period. The value of the bonus programme is assessed annually based on the Black-Scholes option price model. The provision recognised in the 2008 financial year as at 31 December 2007 was € 2,000. Provisions of €10,000 were released in 2008.
In the year under review, total remuneration for former members of the Board of Management was € 818,000 (2007: € 433,000). Pension reserves for
current pensions (DBO under IFRS) totalled € 5,498,000 in the 2008 financial year (2007: € 5,827,000)
At the balance sheet date there were no advances or loans to members of the Board of Management.
Turnover of € 1,747,000 was generated with the joint venture Leifheit CZ a.s. in the financial year 2008. Receivables due from this company at 31 December 2008 were € 1,792,000.
There were no other transactions with related persons or companies outside the group in the year under review.
The AGM on 3 June 2008 re-authorised the Board of Management, while cancelling the existing authorisation, to acquire treasury shares of up to 10% of the current registered share capital of € 15,000,000. The treasury shares acquired can be used for all legally permissible purposes. This enables the company to offer treasury shares directly or indirectly as consideration in company mergers or in connection with the acquisition of enterprises, parts of enterprises or equity investments in enterprises. International competition and globalisation of the economy have led to a situation arising whereby shares are frequently required as payment in such transactions. The authorisation gives the company the necessary freedom of action to take advantage quickly and flexibly of opportunities to acquire enterprises, parts of enterprises or equity investments in enterprises in both national and international markets.
In the fourth quarter of 2008 Leifheit acquired 10,000 treasury shares in order to be able to offer these shares to third parties together with the treasury shares acquired in previous years in the event of appropriate opportunities arising in future for the acquisition of companies, parts of companies or shareholdings in companies or as consideration for incoming investments in the form of companies, parts of
companies and shareholdings in companies, including an increase in a shareholding in Leifheit, as well as in the event of mergers of companies. The treasury shares acquired are equivalent to 0.2% of the registered share capital, representing an amount of € 30,000 of the registered share capital.
60 shares were issued to staff as long-service bonuses in the year under review. This is equivalent to 0.0012% of the registered share capital, representing an amount of € 180 of the registered share capital. Including the treasury shares acquired and issued in previous years, Leifheit therefore holds 250,154 treasury shares as at 31 December 2008. This is equivalent to 5.003% of the company's registered share capital, representing an amount of € 750,000 of the registered share capital. There was an outlay of € 7,686,000 on acquiring these treasury shares. Leifheit did not acquire any treasury shares in the previous year. A total of 170 shares (€ 5,000) were issued in the previous year as long-service and employee shares.
There are no subscription rights for members of the executive bodies and employees in accordance with section 160 para. 1 no. 2 AktG.
At the balance sheet date, shareholders to be disclosed under the Securities Trading Act (WpHG) – i.e. those holding a stake of more than 5 % of the voting
shares – were Home Beteiligungen GmbH, Munich (47.34%), MKV Verwaltungs GmbH, Munich (10.03%) and Joachim Loh, Haiger (6.62%).
On 17 December 2008 the Board of Management and Supervisory Board issued the declaration required under section 161 AktG that Leifheit is in compliance with the recommendations of the Government Commission on the German Corporate Governance Code published by the German Federal Justice Ministry and stating which recommendations are not currently being adopted. The declaration is permanently available on the company's web site.
There were no events after the end of the financial year 2008 of particular importance for assessing the assets, financial situation and earnings of the Leifheit Group.
Please refer to the management report for information on takeovers in accordance with section 315 para. 4 HGB.
As a result of inclusion in the consolidated financial statements, the following fully-consolidated associated German companies are exempt from the audit and disclosure obligations for annual financial statements under section 264b HGB or section 264 para. 3 HGB:
The expense in 2008 for the fees of the group auditors Ernst & Young Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Eschborn/Frankfurt am Main amounted to € 288,000 (2007: € 291,000) for
the audit of the financial statements, € 140,000 (2007: € 161,000) for tax advice and € 66,000 (2007: € 62,000) for other services.
| Chairman | Denis Schrey |
|---|---|
| Ernst Kraft | |
| Dr. Claus-O. Zacharias (since 1 December 2008) | |
| Frank Gutzeit (to 30 September 2008) |
| Chairman | Helmut Zahn | Managing Director of Schuler Beteiligungen GmbH |
|---|---|---|
| Deputy Chairman | Dr. jur. Robert Schuler-Voith | Chairman of the Supervisory Board of Schuler AG |
| Joachim Barnert* | Toolmaker | |
| Karsten Schmidt | Chairman of the Board of Management of Ravensburger AG |
|
| Thomas Standke* | Toolmaker | |
| Dr. rer. pol. Friedrich M. Thomée | Managing partner of Thomée Vermögens verwaltung GmbH & Co. KG |
|
*) Employee representatives
| Audit Committee | Dr. jur. Robert Schuler-Voith | Chairman |
|---|---|---|
| Dr. rer. pol. Friedrich M. Thomée | ||
| Helmut Zahn | ||
| Personnel Committee | Helmut Zahn | Chairman |
| Karsten Schmidt | ||
| Dr. jur. Robert Schuler-Voith |
In addition to supervisory functions at affiliated companies, the members of the Board of Management and Supervisory Board listed below hold the following positions in supervisory boards and similar supervisory bodies in other commercial companies:
| Karsten Schmidt | Ravensburger Spieleland AG, Ravensburg |
Chairman of the Supervisory Board |
|---|---|---|
| Dr. jur. Robert Schuler-Voith | Schuler AG, Göppingen |
Chairman of the Supervisory Board |
| Helmut Zahn | Schuler AG, Göppingen |
Member of the Supervisory Board |
| Flossbach & von Storch Vermögensmanagement AG, Cologne |
Member of the Supervisory Board | |
| Müller Weingarten AG, Weingarten |
Chairman of the Supervisory Board |
Leifheit Aktiengesellschafft The Board of Management
Denis Schrey Ernst Kraft Dr. Claus-O. Zacharias
The Board of Management of Leifheit AG is responsible for ensuring that the consolidated financial statements present a true and fair view of the group's assets, earnings and financial situation and that the group management report presents a true and fair view of the business and situation of the group. In drawing up the consolidated financial statements, the International Financial Reporting Standards (IFRS) were followed in accordance with Regulation (EC) 1606/2002 of the European Parliament and Council of 19 July 2002, and appropriate estimates were made where necessary. The group management report includes an analysis of the group's assets, earnings and financial situation and other information required by the provisions of the German Commercial Code (HGB).
There is an effective internal management and control system to ensure the reliability of the data, both for drawing up the consolidated financial statements (including the group management report) and for internal reporting. This includes uniform accounting guidelines for the group and risk management in compliance with the Control and Transparency in Companies Act (Kon-TraG). This enables the Board of Management to identify material risks in good time and take measures against them.
Ernst & Young AG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Eschborn/Frankfurt am Main, were appointed auditors for the 2008 financial year by the Supervisory Board in accordance with the resolution of the AGM of Leifheit AG.. They have audited the consolidated financial statements and issued the audit opinion below.
The consolidated financial statements, group management report, audit report, report of the Board of Management on the mandatory information under section 315 para. 4 HGB and the risk management were discussed in detail with the auditors by the Financial Statements Committee of the Supervisory Board and by the entire Supervisory Board at its financial statements meeting.
The Board of Management declares that, to the best of its knowledge, and in accordance with the applicable reporting principles, the consolidated financial statements give a true and fair view of the assets, earnings and financial position of the group, and the group management report presents a true and fair view of the business and situation of the group, together with the principal risks and opportunities associated with the expected development of the group.
Nassau / Lahn, 20 April 2009
Leifheit Aktiengesellschaft The Board of Management
Denis Schrey Ernst Kraft Dr. Claus-O. Zacharias
We have issued the following opinion on the consolidated financial statements and the group management report:
"We have audited the consolidated financial statements prepared by Leifheit AG, Nassau, comprising the balance sheet, the income statement, the notes on the consolidated financial statements, cash flow statement and statement of changes in equity, together with the group management report for the financial year from 1 January 2008 to 31 December 2008. The preparation of the consolidated financial statements and the group management report in accordance with IFRS as adopted by the EU, and the additional requirements of German GAAP pursuant to section 315a para.1 HGB (Handelsgesetzbuch - German Commercial Code) are the responsibility of the parent company's management. Our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit. We conducted our audit of the consolidated financial statements in accordance with section 317 HGB and generally accepted German standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW - Institute of Public Auditors in Germany). Those standards require that we plan and perform the audit such that it is reasonably certain that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the group management report will be detected. The business activities and the economic and legal environment of the group and expectations as to possible errors are taken into account in the determination of audit procedures. During the audit, the effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are verified primarily on a sampling basis. The audit includes an assessment of the annual financial statements of those entities included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by management, as well as an evaluation of the overall presentation of the consolidated financial statements and the group management report. We are of the opinion that our audit provides a reasonable basis for our opinion.
We did not express any reservations on the basis of our audit.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRS as adopted by the EU, the additional requirements of German GAAP pursuant to section 315a para. 1 HGB and provide a true and fair view of the net assets, financial position and results of operations of the group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and provides an accurate overall picture of the group's position and accurately sets out the risks and opportunities for the future."
Eschborn/Frankfurt am Main, 20 March 2009 Ernst & Young AG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft
(Signed) Seckler (Signed) von Seidel Wirtschaftsprüfer Wirtschaftsprüfer (German Public Auditor) (German Public Auditor)
The individual financial statement of Leifheit AG, audited by Ernst & Young AG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Eschborn/ Frankfurt am Main, and given an unqualified audit opinion, was drawn up in accordance with German GAAP and the provisions of the German Stock Corporation Act. It is published on the company's web site (www.leifheit.com) and in the electronic Bundesanzeiger (Federal Gazette). It can also be obtained from Leifheit AG, Investor Relations, P. O. Box 1165, D-56371 Nassau/Lahn, Germany ([email protected]).
This financial report contains forward-looking statements which are based on management's current estimates regarding 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 behaviour 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 accepts any specific obligation to update forward-looking statements in line with events or developments after the date of this report.
Technical factors (e. g. conversion of electronic formats) may lead to discrepancies between the financial statements in this financial report and those submitted to the electronic Federal Gazette. In this case the version submitted to the electronic Federal Gazette is binding.
In the event of any discrepancies between this English translation of the financial report and the German version, the German version shall take precedence.
W Investor Relations: tel.: 0 26 04-977-218 fax: 0 26 04-977-340
W Leifheit on the Internet: http://www.leifheit.com E-mail: [email protected]
W 15 May 2009 Quarterly financial report for the period ending 31 March 2009
General meeting 10.30 am, at Leifheit AG Customer and Administrative Centre, Nassau/Lahn
Financial report for the first half year ending 30 June 2009
Quarterly financial report for the period ending 30 September 2009
P.O. Box 11 65 D-56371 Nassau/Lahn Phone: ++ 49 - 26 04 - 977-0 Telefax: ++ 49 - 26 04 - 977-300 Internet: www.leifheit.com E-mail: [email protected]
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