How housework's done today.
Leifheit AG
September 2018 German Fall Conference, Frankfurt
Disclaimer
This presentation contains forward looking statements which are based on the management's current estimates with regard to future developments. Such statements are subject to risks and uncertainties which are beyond Leifheit's ability to control or estimate precisely, such as statements on the future market environment and economic conditions, the behavior of other market participants and government measures.
If one of these uncertain or unforeseeable factors occurs or the assumptions on which these statements are based prove inaccurate, actual results could differ materially from the results cited explicitly or contained implicitly in these statements. Leifheit neither intends to, nor does it accept any specific obligation to update forward-looking statements to reflect events or developments after the date of this presentation.
Leifheit AG shall not assume any warranty for the information provided in this presentation being up-to-date, accurate, complete or of good quality or for the suitability of the information for specific purposes.
Any liability of Leifheit AG for loss caused by the use or non-use of the information provided or by wrong or incomplete information is excluded.
Agenda
- Introduction to Leifheit
- Highlights First Half 2018
- Financial Figures First Half 2018
- Forecast Financial Year 2018
- Key strategic initiatives
- Product and brand initiatives 2018/2019
- Investment Highlights
Introduction to Leifheit
"We are your leading experts for solutions that make your everyday life at home more easy and convenient"
| Leifheit Group |
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|
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Brand Business
(~ 85% of turnover) |
Volume Business
(~ 15% of turnover) |
|
|
Distribution in international markets
Product categories: Cleaning, Laundry Care, Kitchen goods, Wellbeing |
|
|
|
High-quality branded products with a high degree of
consumer benefit, mid to upper price segment
Consistent brand management
Systematic processes for innovation and market launch |
Products in mid-price range
Customer-specific product
development
Strong service component |
|
|
|
Project
Business |
|
|
ORG026A
Introduction to Leifheit
Offering products in four categories
Cleaning
Leifheit has an easy and convenient solution for every cleaning demand. Our high quality cleaning products can be flexibly combined.
Kitchen goods
Opening, cooking, cutting or storing – Leifheit's kitchen accessories simplify work and keep hands and kitchen clean.
Laundry care
Whether it's laundry dryers for the house or rotary dryers for the garden, an ironing board or a steam ironing system – Leifheit ensures fresh, clean and well-kept laundry.
Wellbeing
Soehnle is a leading brand supplier for kitchen and bathroom scales. Air Treatment, medical products and wearables are complementary new assortments for a modern lifestyle.
Distributing in leading distribution channels Introduction to Leifheit
ORG026A
Highlights First Half 2018
Slight turnover growth in the first half
- Slight overall turnover growth in the first half driven by both brand and volume business.
- While the first quarter was partially affected by unfavourable weather conditions, the second quarter saw growth driven by strong performance in the German market.
- Lower sales in Eastern Europe to be viewed within the context of considerable Brand building activities in the first half of the previous year. Comparable measures are expected for the second half of 2018.
- Positive development of new products.
- Market for electrical devices for surface cleaning turned unexpectedly soft.
- EBIT returns to previous year level, after falling short in the first quarter.
Financial Figures First Half 2018
Slight overall turnover growth driven by continued good performance in domestic market
Group turnover by region H1 2018 46.7 % 39.9 % 10.5 % 2.9 % Germany Central Europe Eastern Europe Rest of the world
- Germany grew by 2.1 % based on a good performance of both brand and volume business
- Central Europe remained widely stable with -0.2 %, while Scandinavia, France, Greece and the UK experienced strong growth, sales saw declines in Luxembourg, Italy and Belgium
- Eastern Europe declined by 0.9 %, almost entirely due to brand building activities in Hungary in the first half 2017, while the Czech Republic and Romania grew strongly
Brand Business: Cleaning, Laundry Care, Wellbeing and Online contributed to the growth
|
|
H1 2017 |
H1 2018 |
∆ |
| Turnover |
€
m |
103.2 |
103.4 |
+0.2 % |
| Gross profit |
€
m |
51.6 |
47.9 |
-7.3 % |
Segment result
(EBIT) |
€
m |
6.0 |
5.4 |
-10.2 % |
- Brand Business represents 85.1 % of total sales (H1 2017: 85.3 %)
- Growth drivers: cleaning, laundry care, wellbeing and online
- New products increasingly contribute to success
- Sales in electrical surface cleaning significantly down
- Sales in Eastern Europe down due to brand building activities in previous year
- Gross profit impacted by currency effects, higher material prices, product and customer mix effects
- EBIT supported by improvements in administration costs
Volume Business: Growth driven by kitchen and laundry care products
|
|
H1 2017 |
H1 2018 |
∆ |
| Turnover |
€
m |
17.7 |
18.1 |
1.9 % |
| Gross profit |
€
m |
5.4 |
5.6 |
5.6 % |
Segment result
(EBIT) |
€
m |
0.8 |
1.4 |
81,4 % |
- Volume Business represents 14.9 % (H1 2017: 14.9 %) of group turnover
- Focus on profitability, European markets and project business
- Continued strong turnover increase in Germany and Central Europe compensate decline in sales in USA
- Growth driven by kitchen segment in France and laundry care in Germany
- Gross profit and EBIT growth driven by good performance in France and improved foreign currency results
Group earnings on previous year's level
|
|
H1 2017 |
H1 2018 |
∆ |
| Group turnover |
€
m |
120.9 |
121.5 |
+0.5 % |
| Gross margin |
% |
47.1 |
44.0 |
-3.1 pps |
| Foreign currency results |
€
m |
-1.1 |
0.1 |
>100% |
| EBIT |
€
m |
6.8 |
6.8 |
- |
| EBIT margin |
% |
5.6 |
5.6 |
- |
| Earnings before taxes (EBT) |
€
m |
6.2 |
6.2 |
- |
| Net result for the period |
€
m |
4.4 |
4.4 |
- |
- Gross margin fell by € 3.5 m year on year to € 53.5 m (prev. year: € 57.0 m) as a result of price increases for materials, negative currency effects as well as product- and customer mix effects.
- Drop in gross margin was compensated by lower on-off expenses, improvements in administration costs and the rise in foreign currency results.
Free Cash Flow substantially improved
in €
m |
H1 2017 |
H1 2018 |
∆ |
| Cash flow from operating activities |
-3.5 |
3.0 |
+6.5 |
| Cash flow from investment activities1 |
2.7 |
13.1 |
+10.4 |
Cash flow from
financing activities |
-13.8 |
-10.0 |
+3.8 |
|
|
|
|
| Free cash flow2 |
-5.7 |
1.0 |
+6.7 |
in €
m |
31.12.2017 |
30.06.2018 |
∆ |
| Cash and Cash equivalents at the end of reporting period |
28.2 |
34.2 |
+6.0 |
| Current financial assets |
29.0 |
14.0 |
-15.0 |
| Group liquidity |
57.2 |
48.2 |
-9.0 |
The decline in Group liquidity compared to 31 December 2017 was mainly driven by m € 10 dividend payment and seasonal m € 4 rise in working capital.
1 Adjusted for proceeds from the sale of financial assets, cash outflow was m € 2.0 (previous year: m € 2.2).
2 Sum of cash flow from operating activities and investment activities adjusted for financial assets.
Forecast Financial Year 2018
Forecast Financial Year 2018
Forecast 2018 slightly adjusted
Economic
environment
2018 |
Moderate economic growth in our key European markets
►
External risks of changing US economic policies and a rising
►
level of inflation |
|
|
Forecast Group
development
2018 |
Group:
►
Brand Business:
Volume Business:
EBIT of €
16 m to €
►
Investments of about €
►
Free cash flow of about €
► |
Turnover growth approx. 2.5 –
3.5%
(previously: slightly below 4 –
5%)
Turnover growth approx. 3 –
4%
(previously: slightly below 5 to 6%)
Turnover on previous year's level
17 m (prev.: lower end of €
17 m to €
18 m)
8 m (2017: €
7.8 m)
5 to 7 m |
|
Mid term
Group
development |
Sustainable and profitable organic turnover growth
►
of about 4 % CAGR1
Target EBIT margin of 8 to 9 %
► |
|
|
1 Compound Annual Growth Rate
Key strategic initiatives
Key strategic initiatives
Leifheit's vision
"We are your leading experts for solutions, that make your everyday life at home more easy and convenient."
Key strategic initiatives
Innovation and digitalization as integral part of the strategy
- Drive Product innovations:
- Existing assortment: Improvements and additions
- New segments: Accelerate developments, more output
- Better use of the opportunities of digitalization
- Positioning of brands in the digital media
- Further strengthen E-Commerce position
- Connected products and services
- Digital processes and efficiency
- Sales force effectiveness / efficiency program for stationary
- Geographic expansion to APAC
- Increase efficiency in structure and value chain
- Foreign currency risk reduction by rolling exchange rate hedging system with closer coordination to the planning period
Translating 2018 learnings into new strategies to significantly improve growth and profitability in the coming years.
Vectors of growth: Existing business
Existing business (70 – 80 % of annual turnover growth)
- Further expand online business across all geographies, open-up new e-commerce customers and platforms, drive multi-channel approach
- "Win from strength markets" Europe stationary
- Conversion of existing customer listings in broad distribution by
- Sales effectiveness/efficiency programs
- Marketing/promotion programs
- Closure of listing gaps in existing and new customers
- "Win from behind" markets Europe stationary
- Entry via promotional business into selected customers based on a hunting list
- Conversion of promotions in listings
- "Entrepreneurs" ME/Asia
- More focus since 2018 (Asia)
Vectors of growth: Product Innovation
New products (20 – 30 % of annual turnover growth)
- Outcome of the new product pipeline defined until 2021
- Based on the mega trends relevant for Leifheit:
- Fading of traditional gender rolls
- Electrification
- Digitalization & connectivity
and on Leifheit consumer segmentation
- Innovate in existing assortment:
- NEW: Improving "easiness and convenience" experience
- NEW: Additions and improvements based on consumer relevance
- NEW: "Better and cheaper" as design principle to drive margins
- Innovate with new products in new segments
- "Right to win" for our brands as pre-requisite
- NEW: Increased number of products via improved scouting process
- NEW: Staggered launch process: Quicker go to market via Online and selected stationery customers drives quick learning
Product/Brand Initiatives 2018
More contemporary positioning of Leifheit brand
Well-thought-out and easy-to-use
products from Leifheit. Our Regulus PowerVac 2in1 cordless vacuum cleaner, the CleanTenso steam cleaner, the CLEAN TWIST Cleaning System, the Airboard ironing board and the successful Leifheit window vacuum cleaner…
…all have one thing in common: they help people in today's ever faster-paced world by making housework easier and the home more attractive so that there is more time for the truly important things in life.
Leifheit. How housework's done today.
Strategy "Leifheit 2020" and Key Initiatives 2017/2018 CleanTenso – hygienically clean without chemicals
Strategy "Leifheit 2020" and Key Initiatives 2017/2018 Wireless, absorbent and always ready to hand
ORG026A
ORG026A
Investor presentation I August 2018 I p. 27
Strategy "Leifheit 2020" and Key Initiatives 2017
Soehnle offers simple and comfortable product solutions to identify, present and interpretate important results about your body, nutrition and ambient which will motivate yourself and help to reach your goals to live healthier – consciously.
Product/Brand Initiatives 2018
Kitchen scale Page Aqua Proof – 100% waterproof
Promotions & Product Initiatives 2019
Promotions & Product Initiatives 2019 Anniversary Colour Edition
Promotions & Product Initiatives 2019
Promotions & Product Initiatives 2019
Promotions & Product Initiatives 2019
Investment Highlights
Investment Highlights
Leifheit is more than just household products – for almost 60 years
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