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Leifheit AG

Investor Presentation Nov 25, 2015

261_ip_2015-11-25_8e3bfc1e-d5b8-499f-bab1-519478b8da30.pdf

Investor Presentation

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Leifheit AG

InvestorPresentation

November 2015

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
  • Business development 9M 2015
  • Update "Leifheit 2020"
  • Investment highlights and outlook
  • Annex

Introduction to Leifheit

A leader in the European market of branded goods for selected household areas

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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

Under the Soehnle brand we offer an assortment of scales that always cut a good figure – in the kitchen and the bathroom.

Introduction to Leifheit

Operating in more than 80 countries with 15 own branches

Main Group sites Introduction to Leifheit

Nassau/Germany: headquarter, marketing, sales, R&D, administration

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Zuzenhausen/Germany: logistic center

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Distributed in every important distribution channel

Business development Q3 2015

Group 9M 2015 – turnover > € 173 m (+ 7.1%) driven by growing demand in Germany and Central Europe

  • Germany grew by 7.4% and Central Europe by 8.0%
  • Decline in Russia and Ukraine compensated by growth in Czech Republic, Poland and Slovakia
  • Business outside Europe up by 7.3%

Group key figures 9M 2015 – EBIT rise to € 17.9 m

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  • EBIT growth outpaces sales growth due to increasing contribution margin
  • Gross margin decline retarded
  • Net result for the period grew slightly more than EBIT
  • Cash flow from operating activities affected by an increase in inventories and a decrease in trade payables and other liabilities
  • Free cash flow down due to higher investments

Business development 9M 2015

Brand business 9M 2015 – growth accelerated (+ 6.7%) due to high demand for Leifheit brand

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  • Window vacuum cleaner remains bestseller
  • As part of the Click-System it increasingly fosters sales of other products and solutions
  • E-Commerce sales channel gains momentum
  • EBIT growth follows good sales performance

Volume business 9M 2015 – Sales spiked due to initial stocking to new partner in France

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  • Sales distorted by one-time effect due to initial stocking of a new partner of Birambeau in France
  • Overall objective to stabilize business progresses
  • Project business with kitchen products in the USA again below prior year's performance
  • EBIT up due to sales performance

Business development 9M 2015

Solid financial position continued

  • Equity ratio up to 44.5% due to reduced pension liabilities and the performance-related increase in equity
  • Group liquidity back to 2014 year-end-level despite dividend payment, build-up in inventories and investments

Leifheit's vision for 2020

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

Strategy "Leifheit 2020" will deliver higher levels of growth and excellence

  • Starting with an efficient platform, solid margins and a sharpened profile Leifheit is focusing on future growth:
  • Expansion of the product portfolio
  • Expansion of the customer footprint
  • Expansion of geographical footprint
  • External growth options (focus on core categories)
  • Leifheit is targeting organic growth of 5-6 % CAGR
  • Leifheit defined 10 strategic guidelines to strengthen competitiveness, drive growth and increase sustained profitability:
  • Where to grow?
  • How to grow?
  • Strategic guidelines are the basis for numerous individual projects to create the capability to deliver the growth.

Strategic guideline no. 7 Innovative and leading solutions for target users

  • Leifheit is driving portfolio innovation via increased R&D and marketing power.
  • Definition of innovation degrees improves advance planning and financial risk assessment.
  • Further development of the innovation process ("Innovation Factory") including the consumer, design competency and stringent selection of projects to be realized.
  • Targeting additional product systems with easy and convenient "hero products": from an initial product idea to a full range of product solutions – the basis for next levels of organic growth.

Product systems built on "hero products"

The Leifheit CLICK system … Dust Cleaning Bath Cleaning Window Cleaning HandlesWet/Dry Floor Cleaning Dry Floor Cleaning

… and further extensions

Product system expansion driving topline growth

Leifheit CLICK system net sales

"Leifheit 2020" – on trackUpdate "Leifheit 2020"

Status of major strategic projects

Nov. 2014

"Leifheit 2020"

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Geared towards further growth – organization for approx. € 280 m turnover

€ 10.0 m Turnover growth ~ € 2.0 m EBIT ~ € 1.3 m Net result ~ € 1.0 m Dividend capacity

Investment highlights and outlook

Investment highlights and outlook

Outlook FY 2015 – focus on growth strategy; EBIT expectations specified

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  • Reduced cash flow from investment activities particularly due to higher investments in tangible and intangible assets of € 6.2 m (2013: € 3.6 m) and cash outflow for investments in financial assets of € 3.0 m (2013: € -2.3 m)
  • 1) Sum of cash flow from operating activities and cash flows from investing activities, adjusted for deposits and withdrawals in financial assets and the sale of division.

Group FY 2014 – strengthening of R&D and marketing, expansion of production (enhanced insourcing)

Group FY 2014 – investments on normal level

6.89.83.66.26.8 6.7 6.8 6.302468102011 2012 2013 2014Investments Depreciation Investments vs. depreciation in € m

Investments

  • € 5.1 m (2013: € 3.3 m) investments in tangible assets largely related to tools for new products, machinery and factory and office equipment
  • € 1.0 m (2013: € 0.3 m) investments in intangible assets (mainly software)
  • Investments in Brand business: € 5.5. mVolume business: € 0.7 m
  • Linking the distribution logistics for Eastern Europe at Czech plant in Blatná will lead to higher investments in 2015
  • Future annual investments will remain stable at ~€ 6.0 m

Working Capital at stable levels Annex

Working Capital

  • Working Capital remained stable at a good level of 17.8 %
  • Receivables and inventories above the year-end figures 2013 due to seasonal factors
  • Liabilities rose relating to the balance sheet date

Successful restructuring led to efficiency, improvement of margins and sharpened profile of product categories...

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… and led to significant growth in earnings

Turnover and EBIT adjusted for bathroom division (divested in 2010),

Turnover adjusted for Dr Oetker Bakeware (termination of license agreement by 31.12.2012)

EBIT 2011 adjusted for one-off consolidation effects of € 2.5 m from obtaining control over Leifheit CZ a.s.

EBIT 2012 adjusted for one-off effects of € 1.2 m from sale of assets relating to termination of license agreement Dr Oetker Bakeware

Investor presentation I November 2015 I p. 36 EBIT 2014 includes positive effects from foreign currency results in the amount of € 5.1 m, EBIT margin 2014 adjusted for this effect

"Leifheit 2020" strategic guidelines Wherewe will grow:

1. Consumer

  • Target all females and males who use and/or shop household products for in-home use (indoor/outdoor)
  • Address users who are prepared to buy brand products in the middle to upper price segment as well as value related users who are more price-conscious

2. Brands and categories

  • Focus Leifheit brand on Clean & Care in the middle to upper price segment, cover additional basic price points with (a) second brand(s), target: significant growth
  • Deliver acquisitions in Clean & Care categories
  • Position Soehnle closer to the brand core, target: significant growth
  • Revise Kitchen business model and search for a new brand, target: moderate growth

3. Regions and countries

  • Develop and design for European markets
  • First, exploit European growth opportunities (PL/Iberia/Nordics/UK/rest of EE), as of 2015
  • Second, become intentional in exploiting US / Asia growth opportunities, as of 2018

4. Customers

  • Be distributed wherever our target group wants to shop: globally and in all distribution channels
  • Further strengthen e-commerce position

"Leifheit 2020" strategic guidelines How we will grow: Annex

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Experienced Management Board Annex

Thomas Radke54 I CEO

Core competencies:

  • Driving growth via strategy and business model analysis, development and implementation
  • Marketing and Sales
  • M&A and post-merger integration

Previous experience:

  • CEO Herlitz AG
  • Member of the Board of Directors Pelikan Holding AG
  • General Management, Marketing and Sales positions at Carl Zeiss Vision, Procter & Gamble/Wella, Effem/Mars and Henkel KGaA

Dr Claus-O. Zacharias 61 I CFO

Core competencies:

  • Performance management, process optimisation and value creation concepts
  • Controlling, Finance and Operations
  • M&A and post-merger integration

Previous experience:

  • CFO NICI GmbH
  • CFO Lehnkering GmbH
  • CFO tegut… Gutberlet Stiftung & Co.
  • CFO Steilmann-Holding
  • CFO Eismann International GmbH
  • Controlling/Finance Suedzucker AG

European competitors by category Annex

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Leifheit – 55 years "always a better idea" Annex

Share data and performance Annex

Short-term performance

Long-term performance

Key Data

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Significant free float and international investors Annex

Shareholder structure

as at September 2015

Non free float shareholders1) 23.2%Free float1) 76.8%

1) Definition of German stock exchange for indices

  • MKV Verwaltungs GmbH, Grünwald (D), 10.03%
  • Joachim Loh, Haiger (D), 8.26%
  • Treasury Shares, 4.94%
  • Capital Income Builder, Los Angeles (USA), 5.6 %
  • Carmignac Gestion S.A., Paris (F), 5.49%
  • Union Investment Privatfonds GmbH, Frankfurt (D), 4.00%
  • MainFirst SICAV, Senningerberg (LUX), 4.00%
  • Invesco Limited, Hamilton (BMU), 3.30%
  • Farringdon, Luxemburg (LUX), 3.26%
  • Share ownership under reporting threshold of 3.00%

Recent equity research Annex

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This list contains the analyst reports available to us and has been drawn up to the best of our knowledge. Leifheit cannot give an assurance that the list represents a full overview of all analyst reports available on the market. Any forecasts, opinions, estimates, projections or predictions made by the analysts are theirs alone and do not represent the forecasts, opinions, estimates, projections or predictions of Leifheit or its management. Leifheit assumes no liability for the accuracy of the information therein. This list is provided for information only and is not a solicitation to buy, hold or sell shares.

Financial calendar and contactAnnex

Dates 2016

11 February 2016

Preliminary financial figures for the business year 2015

31 March 2016 Annual financial report for the business year 2015

12 May 2016

Quarterly financial report for the period ending 31 March 2016

25 May 2016

Annual General Meeting

11 August 2016

Quarterly financial report for the period ending 30 June 2016

10 November 2016

Quarterly financial report for the period ending 30 September 2016

Investor Relations

Petra Dombrowsky

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