Leifheit Aktiengesellschaft: Growth in turnover and earnings in the first half of 2023

Leifheit Aktiengesellschaft: Growth in turnover and earnings in the first half of 2023

• Group turnover up 1.3% to EUR 138.1 million in the first half of 2023 despite challenging market environment
• Gross margin improved in the second quarter
• Group EBIT rises to EUR 4.8 million
• Free cash flow up EUR 18.1 million to EUR 7.6 million
• Group forecast for 2023 confirmed
• Stefan De Loecker appointed interim Chairman of the Board of Management from 1 August 2023; mandate in the Supervisory Board temporarily suspended

Nassau, 10 August 2023 – Leifheit AG (ISIN DE0006464506), one of the leading brand suppliers of household goods in Europe, generated turnover of EUR 138.1 million in the first half of 2023 despite persistently challenging market conditions. This figure represents a 1.3% increase on the same period of the previous year (EUR 136.3 million). One of the main drivers of this trend was the German domestic market, where turnover rose by 2.4% to EUR 61.6 million in the first half of 2023 (previous year: EUR 60.1 million) on the back of successful advertising campaigns. Turnover also grew in the Central Europe sales region, climbing by 3.4% to EUR 57.6 million (previous year: EUR 55.7 million). Here too, TV campaigns in selected markets and the successful expansion of distribution activities contributed to the growth.

The Leifheit Group generated earnings before interest and taxes (EBIT) of EUR 4.8 million (previous year: EUR 2.1 million) in the first half of 2023. The EUR 2.7 million increase resulted primarily from the rise in gross margin on account of higher sales prices and positive product mix effects. Productivity gains in production and logistics made it possible to partially balance out the raw material and energy prices, which remained on a high level. Less taxes, this equalled a net result for the period of EUR 2.6 million in the first half of 2023.

At EUR 37.0 million, Group liquidity as at 30 June 2023 was up significantly year on year (30 June 2022: EUR 17.4 million). In the first half of 2023, free cash flow achieved a value of EUR 7.6 million following EUR -10.5 million in the same period of the previous year. The improvement in working capital made a major contribution to this rise of EUR 18.1 million. While the reduction of inventories had a positive effect in this regard, the Group also saw a seasonal increase in trade receivables that the significantly lower inventories as at the reporting date were more than able to compensate for.

In the Household segment, the Leifheit Group generated turnover of EUR 115.0 million in the first half of 2023 (previous year: EUR 113.4 million), which equates to growth of 1.4%. In particular, stronger consumer interest in electricity-saving products had a positive effect on this segment. The Leifheit Group was able to benefit from this as a result of successful advertising campaigns like “Electricity Savers”, which shifted consumers’ attention to rotary dryers and drying racks. Accordingly, the laundry care category posted considerable turnover growth in the first half of the year.

In addition, the company recorded an increase in turnover of 4.4% in the Wellbeing segment, with its Soehnle brand, following a sharp decline in the previous-year period. Turnover rose from EUR 8.3 million in the same period of 2022 to EUR 8.7 million in the first half of 2023.

In the Private Label segment, which mainly comprises sales of private-label brands by the French subsidiaries Birambeau and Herby, turnover remained largely stable, falling only slightly by 1.2% to EUR 14.4 million in the first half of 2023 (previous year: EUR 14.6 million). While Birambeau’s kitchen products recorded slight declines in turnover, sales of Herby’s energy-saving drying racks increased. 

Even in its new constellation, the Board of Management will continue the company’s successful activities. As at 1 August 2023, Stefan De Loecker took over as Chairman of the Board of Management on an interim basis. He succeeds Henner Rinsche, who left the company by mutual consent as at 31 July 2023. Mr De Loecker’s mandate as Deputy Chairman of the Supervisory Board of Leifheit AG is temporarily suspended until a new CEO takes office. He is a proven industry expert with more than 30 years’ experience in management positions in the global consumer goods sector and extensive know-how in the field of brand management. His CV includes a spell as CEO of Beiersdorf AG. 

In the second half of 2023, the company will focus on promising innovations in the areas of laundry care and cleaning. Leifheit is ideally positioned to benefit from the general shift in consumer demand towards energy- and CO₂-saving household products, thanks to its Linomatic rotary dryers and the Pegasus drying racks, to name just two examples. One exciting innovation in the dryer range is the new Pegasus 150 Solid Slim Black. The premium drying rack in a combination of black and anthracite reflects a current colour trend and is aimed at a target group with high aesthetic standards in terms of home décor who is unwilling to compromise when it comes to the quality of their laundry accessories. A special consumer benefit can be found in the Leifheit Window & Frame Cleaner. The product makes it possible to efficiently clean solar modules on home balconies, helping the panels generate up to 15% more output. Leifheit is thus providing additional sales impetus in the trade and expanding the product portfolio for new target groups.

At the same time, the Leifheit Group continues to face a very challenging market environment in the second half of financial year 2023. Sustained high inflation and a persistently poor consumer climate could have a perceptible impact on consumer demand. Prices for energy, freight and raw materials, which remain on high levels, also continue to constitute a challenge.

In light of this, the Board of Management of Leifheit AG continues to forecast a slight year-on-year decline in Group turnover for financial year 2023 and once again expects positive earnings before interest and taxes (EBIT) for the Group in the low single-digit million-euro range. On this basis, free cash flow is also expected to be in the lower single-digit million-euro range.

Further information can be found in the financial report for the first half-year ending 30 June 2023, available at https://www.leifheit-group.com/en/investor-relations/reports-and-presentations/.

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.