Leifheit AG

Investor Presentation • Nov 28, 2018

How housework's done today.

Leifheit AG German Equity Forum

November 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
• Financial Figures 9M 2018
• Forecast Financial Year 2018
• Key strategic initiatives
• Product and brand initiatives
• Investment Highlights

Introduction to Leifheit

Introduction to Leifheit

Experienced Management Board

Ivo Huhmann *1969 CFO & CO-CEO ad interim

Finance, Controlling, Audit, Business Processes/IT, APAC Sales and ad interim Global Sales + Marketing

Core competencies

• Value creation, performance management, controlling, turnaround
• Creating strategic growth models
• Digitalization, IT, Six Sigma, Lean
• China operations and sales
• M&A, post-merger integration, cultural change

Previous experience

• CEO Bergluft Co. Ltd. Startup
• Managing Director Stiebel Eltron
• CFO General Electric-Healthcare Germany
• CFO General Electric-Fanuc Europe
• Various global financial management functions in General Electric

Igor Iraeta Munduate *1974 COO & CO-CEO ad interim

Production, Logistics, R+D and Purchasing divisions and ad interim HR

Core competencies

• International experience in modern operations environments
• Digitalization, IoT, Industry 4.0
• Implementation of learning organizations and excellence culture
• Creation of new business
• Implementation of lean
• production systems
• Agile methods "scrum"

Previous experience

• CTO and Senior Executive Global Operations at Igus GmbH
• CTO, Stakeholder and Managing Director at Stoba Präzisionstechnik GmbH & Co. KG
• Various technical executive positions at Robert Bosch GmbH

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

Introduction to Leifheit

Offering high-quality products in four categories

• Easy and convenient solution for every cleaning demand
• Our high quality cleaning products can be flexibly combined

Laundry care

Laundry dryers for the house, rotary dryers for the garden, an ironing board or a steam ironing system ensure fresh, clean and well-kept laundry

Kitchen goods

• Kitchen accessories simplify work and keep hands and kitchen clean
• Used for opening, cooking, cutting or storing

Wellbeing

• Soehnle is a leading brand for kitchen and bathroom scales
• Air Treatment, medical products and wearables: complementary new assortments for a modern lifestyle

Present in leading distribution channels Introduction to Leifheit

ORG026A

Introduction to Leifheit

Operating in more than 80 countries with 15 own branches

ORG026A

Financial Figures 9M 2018

Group turnover stable on previous year's level

Group turnover by segment

9M 2017 vs 9M 2018 / in € m

• Brand Business with slight sales growth driven by Cleaning and Wellbeing categories
• Volume Business shows turnover decline

Group turnover by region

Germany and Central Europe show moderate growth

9M 2017 vs 9 M 2018 / in € m 77.2 74.6 19.3 6.4 77.6 75.2 19.1 5.1 0 10 20 30 40 50 60 70 80 90 Germany Central Europe Eastern Europe Rest of World 9M 2017 9M 2018

Group turnover by region

9M 2018

• Germany up 0.4 % based on growth of brand and volume business
• Central Europe up 0.9 %. Lower sales in Belgium, Luxembourg and Austria overcompensated by a good performance in France, Italy, UK and Greece
• Eastern Europe down 1.1 %, mostly due to brand building in Hungary in 2017, Poland, Czech Republic and Romania grew strongly

Brand Business: Sales growth in Central Europe through established labels

		9M 2017	9M 2018	∆
Turnover	€ m	149.6	150.3	+0.5 %
Gross profit	€ m	73.2	68.6	-6.3 %
Segment result (EBIT)	€ m	9.0	6.6	-26.7 %

Brand Business: 84.9 % of total sales (9M 2017: 84.3 %)

• Growth drivers: cleaning, wellbeing and Online
• New products increasingly contribute to success and offset continuing market weakness for electrical glass surface cleaning
• Gross profit impacted by strengthening of USD, higher material prices, product and customer mix effects
• EBIT affected by extraordinary costs for changes in the management board

Volume Business: Decline in Central Europe and USA define sales performance

		9M 2017	9M 2018	∆
Turnover	€ m	27.9	26.7	-4.3 %
Gross profit	€ m	8.8	8.2	-6.8 %
Segment result (EBIT)	€ m	2.3	2.1	-8.7 %

• Volume Business represents 15.1 % (9M 2017: 15.7 %) of group turnover
• Continued strong sales growth in Germany cannot compensate decline in Central Europe and USA
• Growth with Birambeau kitchen products cannot make up for lack of sales volume with Herby laundry care products and project business
• EBIT and gross profit decline mainly due to lack of sales

Financial Figures 9M 2018

Group earnings below previous year's level

		9M 2017	9M 2018	∆
Group turnover	€ m	177.5	177.0	-0.3 %
Gross profit	€ m	82.0	76.8	-6.4 %
Gross margin	%	46.2	43.4	-2.8 pps
Foreign currency results	€ m	-1.6	0.2	>100 %
EBIT	€ m	11.3	8.7	-23.0 %
EBIT margin	%	6.4	4.9	-1.5 pps
Earnings before taxes (EBT)	€ m	10.5	7.9	-24.7 %
Net result for the period	€ m	7.4	5.5	-25.2 %

• Gross profit affected by USD exchange rate, price increases for materials as well as product- and customer mix effects
• Lower gross margin despite improvements in sales and administration costs and the improvement in foreign currency results

Financial Figures 9M 2018

Free Cash Flow substantially improved

in € m	9M 2017	9M 2018	∆
Cash flow from operating activities	0.1	7.6	+7.5
Cash flow from investment activities1	1.7	11.1	+9.4
Cash flow from financing activities	-13.8	-10.0	+3.8
Free cash flow2	-3.2	3.6	+6.8

in € m	31.12.2017	30.09.2018	∆
Cash and Cash equivalents at the end of reporting period	28.2	36.9	+8.7
Current financial assets	29.0	14.0	-15.0
Group liquidity	57.2	50.9	-6.3

• Improvement of Free Cash flow mainly resulting from higher cash flow from operating activities due to optimization of inventory and a lower decrease of liabilities
• Decline in Group liquidity mainly driven by € 10 m dividend payment
• Working Capital at € 52.0 m and improved by € 0.7 m vs. 30.09.2017

1 Adjusted for proceeds from the sale of financial assets, cash outflow was € 7.5 m (previous year: € 4.9 m).

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

Forecast Financial Year 2018

Turnover and EBIT forecast reduced

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: ►	Turnover on previous years' level (previously: slightly below 2.5 to 3.5%)
	Brand Business:	Turnover slightly above previous year (previously: slightly below 3 to 4%)
	Volume Business:	Turnover slightly below previous year (previously: on previous year's level)
	EBIT of € 13 m to € 14 m (prev.: lower end of € 16 m to € 17 m) ► Investments of about € 8 m to € 9 m (2017: € 7.8 m) ►
	Free cash flow of about € 5 m to € 6 m ►

Key strategic initiatives

Changing Market environment

Market environment offers attractive growth opportunities

Digitalization

Connectivity of products and services

E-Commerce

High growth rates for household goods & appliances (2016/2017: +26.5%)

Convenience

Demand-oriented product innovation through systematic innovation and market introduction processes

Demographic change

More private households, rising proportion of older population & higher quality orientation among young households

Health

Demand for well-being and healthcare products due to growing health awareness

Technological change

High demand for battery-powered devices

Key strategic initiatives

Adjusted strategy focuses on four main areas: Digitalization, Innovation, Internationalization, Efficiency

Best possible and efficient management of all sales channels

Offline and online integration

Further strengthen E-Commerce position throughout Europe

• Systematic data analysis and a joined platform
• Enhancing consumer communication and services

Drive consumer-oriented product innovations

• Improvements and additions to existing assortment
• Accelerate developments and more output in new segments

International geographic expansion

Focusing Eastern Europe and Asia-Pacific

Increase efficiency, digitalize

• SAP Implementation at Czech production plant
• Optimization of SAP landscapes along the entire value chain
• Process optimization for improved forecasting and planning capabilities

Product/Brand Initiatives 2018

Anniversary Colour Edition

Product/Brand Initiatives 2019

Investment Highlights

Investment Highlights

For 60 years one of the leading suppliers of household products in Europe

High-quality innovative products for cleaning, laundry care, kitchen and wellbeing with high utility and functional design

Leifheit products used every day

High awareness and consumer confidence

Demand-oriented product innovation through systematic innovation and market introduction processes

Changing market

Digitalization, e-commerce and convenience create attractive growth opportunities

International sales network

Promotes market penetration and further internationalization

Finance structure

Efficient cost structure and solid financial position

Shareholderoriented dividend policy

Distribution of approx. 75% of max (free cash flow, net income) targeted, surplus cash for shareholders

Strong long-term share price performance

Since 2008 +111% and thus above SDAX (+105%)

Financial calendar, share data and contact Annex

Dates 2019

28 March 2019 Annual Financial Reports 2018 Analyst's meeting, Frankfurt/Main, Germany

14 May 2019 Quarterly statement Q1

29 May 2019 Annual General Meeting, Frankfurt/Main, Germany

13 August 2019 Financial report for the period ending 30 June 2019

12 November 2019 Quarterly statement Q3

Share data

ISIN: Ticker:	DE0006464506 LEI:GR, LEIG.DE
Trading segment: Share capital:	Prime Standard € 30,000,000.-
Number of shares:	10,000,000 no-par value ordinary bearer shares
Stock market launch:	3 October 1984
Designated Sponsor:	Oddo Seydler Bank AG

Contact

Petra Dombrowsky

Corporate Communications / Investor Relations

Phone: +49 2604 977-218 Email: ir@leifheit.com

www.leifheit-group.com

Aktiengesellschaft

Postfach 11 65 56371 Nassau/Lahn www.leifheit -group.com