Leifheit AG

Earnings Release • May 15, 2018

Leifheit AG Investor presentation

May 2018

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 Quarter 2018
• Financial Figures First Quarter 2018
• Forecast Financial Year 2018
• Strategy "Leifheit 2020" and Key Initiatives 2018
• Investment Highlights
• Your Questions

Introduction to Leifheit

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

Leifheit Group
Brand Business Volume Business (~ 85% of turnover) (~ 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

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

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Introduction to Leifheit

Operating in more than 80 countries with 15 own branches

Highlights First Quarter 2018

Germany continues on solid growth trajectory

Sales affected by unfavorable weather conditions

• Group turnover in Q1 2018 almost on par with the previous year
• Substantial growth in Germany both in brand business and volume business despite unfavorable weather conditions in March
• Reorganization of sales force in Germany shows good effects
• Lack of sales volumes in Central Europe
• Lower sales in Eastern Europe has to be reviewed within the context of considerable Brand building activities in the first quarter of the previous year – similar activities are planned in other regions for subsequent quarters of this year
• EBIT under impression of lower gross profit as a result of currency effects, increased material prices and sales deductions, improvements in distribution and administration costs were unable to fully balance out this

Dividend remains strong

Proposing stable ordinary dividend for business year 2017

Financial Figures First Quarter 2018

Domestic market position substantially increased

52.7 52.8 9.8 9.4 62.5 62.2 0 10 20 30 40 50 60 70 Q1 2017 Q1 2018 Volume business Brand business Group turnover by segment Q1 2017 vs Q1 2018 / in € m

Group turnover by region Q1 2018 48.7 % 38.6 % 9.9 % 2.8 % Germany Central Europe Eastern Europe Rest of the world

• Germany grew by 4.9% due to a strong performance of both brand business and volume business despite unfavorable weather conditions in March
• Central Europe declined by 2.7%, double-digit growth rates in Scandinavia and the French brand business were unable to balance out declines in Luxembourg, Italy, the Netherlands and Volume Business in France
• Eastern Europe declined by 10.9%, almost entirely due to the expiration of brand building activities in Hungary, while Slovakia, Romania and Russia grew strongly

Brand Business: strong growth in Germany while sales declined in Eastern and Central Europe

		Q1 2017	Q1 2018	∆
Turnover	€ m	52.7	52.8	+0.3 %
Gross profit	€ m	26.8	24.8	-7.9 %
Segment result (EBIT)	€ m	4.3	4.2	-1.8%

• High quality products by Leifheit and Soehnle brands are the center piece of the "Leifheit 2020" growth strategy
• Brand Business represents 84.9 % of total sales (Q1 2017: 84.3 %)
• Substantial growth drivers: laundry care and wellbeing
• New products already contribute to success
• Turnover affected by lack of sales volumes in Eastern Europe related to brand building activities in the previous year
• Gross profit impacted by currency effects, higher material prices and sales deductions
• EBIT recovered by improvements in distribution and administration costs

Volume Business: lower sales volume in France not entirely compensated by strong domestic growth

		Q1 2017	Q1 2018	∆
Turnover	€ m	9.8	9.4	-4.1 %
Gross profit	€ m	3.1	2.9	-5.7 %
Segment result (EBIT)	€ m	0.8	0.5	-35.7 %

• Focus on profitability, European markets and project business
• Continued strong turnover increase in Germany cannot compensate for decline in France and USA
• Volume Business represents 15.1 % (Q1 2017: 15.7 %) of group turnover
• Decline in turnover result of lower sales volumes at a French hypermarket

Group results at a glance

		Q1 2017	Q1 2018	∆
Group turnover	€ m	62.5	62.2	-0.4 %
Gross margin	%	47.8	44.6	-3.2 pps
Foreign currency results	€ m	0.1	-0.1	-
EBIT	€ m	5.1	4.7	-8.3 %
EBIT margin	%	8.2	7.5	-0.7 pps
Earnings before taxes (EBT)	€ m	4.8	4.3	-10.0 %
Net result for the period	€ m	3.4	3.1	-9.8 %

Free Cash Flow improved Financial Figures First Quarter 2018

in € m	Q1 2017	Q1 2018	∆
Cash flow from operating activities	-4.1	-4.0	+0.1
Cash flow from investment activities	-1.8	-0.9	+0.9
Free cash flow1	-5.9	-4.9	+1.0

1 Sum of cash flow from operating activities and investment activities adjusted for financial assets

Proposal to the Annual General Meeting on May 30, 2018: stable ordinary dividend

Board of Management and Supervisory Board propose appropriating the Leifheit AG balance sheet profit of 10.000.000 € as follows:

Dividend of € 1.05

per eligible no-par-value bearer share

Forecast Financial Year 2018

2018 forecast slightly adjusted Forecast Financial Year 2018

Economic environment 2018	Moderate economic growth in our key European markets ► External risks of changing US economic policies, a rising ► level of inflation and regional conflicts
Forecast Group development 2018	Continue to pursue group growth strategy "Leifheit 2020", ► despite current risks in the retail sector Group: Turnover growth slightly below 4 – 5% ► Brand Business: Turnover growth slightly below 5 – 6% Volume Business: Turnover on previous year's level EBIT at the lower end of € 17 m to € 18 m, ► return to target EBIT margin as of 2019 Investments of about € 8 m (2017: € 7.8 m) ► Free cash flow of about € 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

Strategy "Leifheit 2020" sharpened -Key Initiatives 2018

Strategy "Leifheit 2020" sharpened - Better use of the opportunities of digitalization

• Strengthen our existing assortment, accelerate development of new products
• Sales force effectiveness / efficiency program
• Increase efficiency in structure and value chain
• Foreign currency risk reduction by rolling exchange rate hedging system with closer coordination to the planning period
• Digitalization as an integral part of the strategy
• Positioning of brands in the digital media
• Further strengthen E-Commerce position
• Connected products and services
• Digital processes and efficiency

2018: implementation of important future-oriented projects that will strengthen our mid-term comprehensiveness and significantly improve profitability in the future.

Vectors of growth: New products vs existing business

New products (20 – 30 % of annual turnover growth)

• Outcome of the new product pipeline defined until 2020
• Based on the mega trends relevant for Leifheit:
• Fading of traditional gender rolls
• Electrification
• Digitalization & connectivity
• Based on Leifheit consumer segmentation
• New product development closer to existing assortments
• Different innovation streams by grade of technical change / newness of application

You have something against bacteria? So do we!

CleanTenso

Simply hygienic and clean without chemicals.

How housework's done today.

www.leifheit.com

For the many small battlefields of the day

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Cordless Vacuum Cleaner Regulus PowerVac $2_in1$

Cordless, powerful, ready-to-go

How housework's done today.

twww.leifheit.com

New digital business segment Soehnle connect

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Vectors of growth: New products vs. existing business

Existing business (70 – 80 % of annual turnover growth)
 Further expand online business across all geographies, open-up new e-commerce customers, 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 as of 2018 (Asia)

Sales effectiveness and efficiency program in Germany

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.

More contemporary positioning of Leifheit brand Strategy "Leifheit 2020" sharpened - Key Initiatives 2018

TV advertisement

Q1 2018	CLEAN TWIST System
Q1 2018:	Window vacuum Dry & Clean
Q1 2018:	Lino Protect 400
Q4 2018:	Air Board

Focus on Online communication Strategy "Leifheit 2020" sharpened - Key Initiatives 2018

• Accompanying measures related to TV advertisements
• Strengthening online awareness of Leifheit brand and tapping into modern target groups
• Campaigns in wide-reach online media channels for selected Leifheit products:

Google Display, Youtube, Facebook, Instagram

Investment Highlights

Committed to shareholder returns Investment Highlights

Long-term dividend development

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1 Proposal to the Annual Meeting

We drive from strength Investment Highlights

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

Leifheit is more than just household products

Leifheit is more than just household products – for almost 60 years

Your questions please.