DGAP-News: Leifheit Aktiengesellschaft / Key word(s): 9 Month figures/Quarterly / Interim Statement 11.11.2021 / 08:26 The issuer is solely responsible for the content of this announcement.
Leifheit AG: Successful business development in the first nine months of 2021
Nassau, 11 November 2021 - Leifheit AG (ISIN DE0006464506), one of the leading brand suppliers of household products in Europe, achieved significant turnover and earnings growth in the first nine months of financial year 2021. During this period, the Leifheit Group generated earnings before interest and taxes (EBIT) of EUR 16.6 million, which equates to an increase of 8.1% compared to the previous year's figure of EUR 15.4 million. Gross profit rose by EUR 6.1 million to EUR 96.4 million, whereas the gross margin fell by 2 percentage points to 42.7% against the backdrop of higher raw material and freight prices. At 7.3%, the EBIT margin nearly matched the figure from 2020 (previous year: 7.6%) thanks, in no small part, to a strict cost management. Less taxes, this equalled a net result for the period of EUR 11.5 million in the first nine months of 2021 (previous year: EUR 10.6 million). Free cash flow improved to EUR 7.1 million after EUR -0.3 million in the same period in the previous year.
All relevant sales regions post turnover growth
Double-digit turnover growth was the main factor behind the rise in earnings in the first nine months of 2021. Group turnover stood at EUR 226.0 million, up 11.9% on the corresponding figure of EUR 201.9 million seen in 2020. The domestic market of Germany, where the Leifheit Group succeeded in achieving a disproportionately strong 20.0% increase in turnover, played a substantial role in this positive development. The Leifheit Group also recorded a 9.1% rise in turnover in Central Europe in the first nine months of 2021, with the key markets of France and Italy joining Scandinavia in delivering double-digit growth rates. In both countries, the effects of successful TV campaigns and the expansion of the distribution network as a result of the efforts to step up marketing activities had a positive impact. The markets in the Eastern Europe region also made a significant contribution to the success of the company. In particular, Leifheit again generated double-digit growth in the Czech Republic, the region's highest-turnover market, thanks to increased consumer advertising.
Henner Rinsche, Chairman of the Board of Management of Leifheit AG, says: "We are continuing on our growth trajectory in the current financial year, despite increasingly challenging overall conditions. The considerable improvement in turnover and earnings that we recorded in the first nine months of the year reflects the positive effects of the Scaling up Success growth strategy, which we will continue to implement consistently and systematically. In the current financial year, we have invested more heavily in consumer advertising for our Leifheit and Soehnle brand products as part of our strategic marketing initiatives. As a result, we were again able to further strengthen in particular our core brand Leifheit as a growth driver in the third quarter. We will continue our investments up to the end of the year and into 2022, including a wide-ranging print campaign designed to showcase the Soehnle Page Profi 300 kitchen scale, which has been awarded the test rating 'very good' by 'Haus & Garten Test' magazine."
Double-digit growth in key Household segment with Leifheit brand
In the Household segment, the Leifheit Group grew turnover by 13.2% in the first nine months of financial year 2021 to a total of EUR 182.6 million (previous year: EUR 161.3 million). In this category, Leifheit also benefited from the positive effects of TV advertising campaigns for cleaning products. The highest-turnover category, laundry care, also developed positively in the reporting period, achieving nearly double-digit turnover growth. By contrast, development was weaker in the category kitchen goods, where a shift in consumer spending priorities made itself felt.
With the Wellbeing segment's Soehnle brand, the Leifheit Group generated total turnover of EUR 19.8 million (previous year: EUR 18.5 million). The 6.7% rate of turnover growth indicates a slight slowing year on year, due also to the impact of the restrictions introduced in response to the COVID-19 pandemic. Thanks mainly to the expansion of marketing activities, Soehnle kitchen scales also saw significant growth. By contrast, the strong demand for air treatment products seen in the previous-year period as well as in the first half of 2021 eased in the third quarter.
Turnover in the Private Label segment stood at EUR 23.6 million in the first three quarters of 2021, resulting in an increase of 6.9% year on year (previous year: EUR 22.1 million). This growth was attributable to the normalisation of activity in the bricks-and-mortar retail sales channel in France, which was particularly hard hit in the previous-year period due to temporary closures stemming from pandemic-related restrictions.
Mounting challenges in the supply chain
Business development in the first nine months of 2021, which was very good overall, was increasingly impacted by the continued effects of the COVID-19 pandemic and the implications for procurement markets worldwide. Further commodity price hikes, limited availability of freight capacity and associated cost increases and supply bottlenecks left their mark on business development in the third quarter, as can be seen in particular in earnings. In the third quarter of 2021 alone, Group EBIT stood at EUR 3.0 million, compared to EUR 6.6 million in the same period of the previous year. At EUR 69.7 million, Group turnover in the third quarter nearly matched the exceptionally strong previous-year period, in which turnover of EUR 71.6 million was recorded.
Looking ahead at the final quarter of the current financial year, Henner Rinsche says: "In view of current market trends, we expect the turbulence in global supply chains to remain a challenge for the Leifheit Group in the coming months. At the same time, we can only pass necessary sales price increases on to the market with some delay. The effects of these steps to respond to the more difficult overall conditions will only be partially apparent in earnings in the current financial year. We will continue to focus on working to prepare the Leifheit Group for the tense situation on the global procurement markets while maintaining our growth trajectory."
In light of the business development in the third quarter and the continued challenges in the supply chain, the Leifheit Group's Board of Management reassessed its earnings forecast for 2021 as a whole on 13 October 2021. Based on an unchanged Group turnover forecast of at least 5% growth year on year, the Board of Management now anticipates Group EBIT of between EUR 15 million and EUR 20 million for 2021. Based on this, a free cash flow of roughly EUR 4 million to EUR 8 million is expected.
Further information can be found in the quarterly statement for the period ending 30 September 2021, available at financial-reports.leifheit-group.com.
About Leifheit Leifheit AG, founded in 1959, is one of the leading European brand suppliers of household items. The Leifheit Group divides its operating business into the Household, Wellbeing and Private Label segments. Leifheit and Soehnle products - two of Germany's best-known household brands - are known for high quality and great utility for consumers. Its French subsidiaries Birambeau and Herby are active in the service-oriented Private Label segment with a selected product range. In each segment, the company focuses on its core product categories of cleaning, laundry care, kitchen goods and wellbeing. The Leifheit Group employs some 1,100 people. More information on Leifheit is available online at www.leifheit-group.com, www.leifheit.de and www.soehnle.de.
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