Leifheit AG on track for growth again in financial year 2023

Leifheit AG on track for growth again in financial year 2023 

• Group turnover up 2.7% to EUR 258.3 million in 2023
• Group EBIT rises significantly to EUR 6.0 million in spite of compensation payment and other expenses associated with the change in the Board of Management amounting to EUR 2.7 million
• Sharply improved free cash flow reaches EUR 12.1 million
• Dividend of EUR 0.95 plus special dividend of EUR 0.10 per dividend-entitled bearer share proposed
• Forecast for 2024: slight growth in Group turnover, Group EBIT between EUR 10 million and EUR 12 million expected
• Company strategy to be revised with focus on profitable long-term growth

Nassau, 27 March 2024 – Leifheit AG (ISIN DE0006464506), one of the leading brand suppliers of household goods in Europe, has logged a successful financial year 2023 in spite of subdued consumer mood and achieved the turnover and earnings forecast for 2023 that was recently adjusted upwards. Thus, the Leifheit Group achieved turnover of EUR 258.3 million (2022: EUR 251.5 million). This corresponds to an increase in turnover of 2.7% compared to the previous year. Targeted marketing campaigns in selected sales markets, product innovations and the successful expansion of distribution were especially important in contributing to the company’s success.

Group earnings before interest and taxes (EBIT) rose significantly to EUR 6.0 million (2022: EUR 2.8 million), although earnings were affected by compensation payment and other expenses associated with the change in the Board of Management amounting to EUR 2.7 million and by procurement and energy costs that, while slightly lower, still hovered at a high level.

The clear uptick in earnings was primarily the result of rising turnover and the increase in the gross margin due to sales price adjustments and positive product mix effects. Rigorous lean management in production and logistics also allowed the company to realize productivity gains and positive cost effects.

Free cash flow rose by EUR 3.3 million in 2023 to stand at EUR 12.1 million (2022: EUR 8.8 million). The measures taken to improve working capital proved fruitful.

Alexander Reindler, Chairman of the Board of Management of Leifheit AG, explains: “In financial year 2023, we forged ahead with selected marketing campaigns and were able to increase our turnover in our home market of Germany and in other significant sales markets in Europe in spite of the tough economic environment and subdued consumer mood. In Germany, for example, the ‘Electricity Savers’ campaign urged consumers to dry their laundry without using electricity, which spurred demand for the Leifheit Pegasus drying rack and for rotary driers like the Leifheit Linomatic. We are also focusing on optimizing our processes across all divisions and leveraging efficiencies to counteract the general increase in prices. We were already quite successful in that in 2023.”

Turnover by region

Turnover growth was driven by all core regions in 2023. In the German domestic market, the Leifheit Group’s turnover rose by 4.9% from EUR 98.8 million in the previous year to EUR 103.7 million in 2023. In Central Europe, revenue increased by 2.9% to EUR 114.4 million (2022: EUR 111.2 million). Turnover was also up by 2.1% to EUR 34.9 million in the Eastern Europe sales region during this reporting period (2022: EUR 34.2 million). In the non-European markets, by contrast, turnover decreased by 27.4% to EUR 5.3 million (2022: EUR 7.3 million).

Turnover by segment

In the Household segment with the Leifheit brand, turnover grew by 3.8% from EUR 204.2 million in the previous year to EUR 211.9 million in 2023. Against the backdrop of the successful ad campaigns, the laundry care category saw particularly significant turnover growth during this reporting period, as consumer interest in electricity-saving products rose. The cleaning category also grew slightly, which can be attributed to the increased demand for mechanical cleaning products.

Turnover in the significantly smaller Wellbeing segment with the Soehnle brand rose by 1.5% from EUR 16.1 million to EUR 16.4 million. By contrast, turnover in the Private Label segment with the French subsidiaries Birambeau and Herby fell short of the previous year’s figure of EUR 31.2 million by 3.9%, standing at EUR 30.0 million in the reporting period.

Group liquidity

The Leifheit Group’s capital structure remained solid in financial year 2023. As at 31 December 2023, liquidity had risen to EUR 41.3 million (2022: EUR 36.3 million). Equity stood at EUR 103.8 million as at the balance sheet date of 31 December 2023 (2022: EUR 112.5 million). Consequently, the equity ratio as at the balance sheet date declined by only one percentage point to stand at the current figure of 51.0% (2022: 52.0%), remaining at a high level. As in previous years, the Leifheit Group had no liabilities to banks at the end of financial year 2023.

Dividend increase and special dividend for financial year 2023

The Board of Management and the Supervisory Board will propose a dividend per dividend-entitled bearer share that has been increased to EUR 0.95 for financial year 2023 (previous year: EUR 0.70 per dividend-entitled bearer share) to the Annual General Meeting on 29 May 2024. This proposal is congruent with Leifheit AG’s dividend policy, which provides as a matter of principle for distributing roughly 75% of the net result for the period or the free cash flow of a financial year as dividends.

The Board of Management and the Supervisory Board will also propose paying a special dividend amounting to EUR 0.10 per dividend-entitled bearer share. The goal of the special dividend is to allow shareholders to participate in the Leifheit Group’s good liquidity position.

The proposed overall dividend of EUR 1.05 will tie in with the company’s track record of shareholder-oriented dividend payments. The total amount to be distributed would amount to EUR 9,996,696.15. Based on the Xetra closing price at the end of 2023, that works out to a dividend yield of 6.5%.

Outlook for 2024

The Board of Management of Leifheit AG expects slight year-on-year growth in Group turnover for financial year 2024. At the same time, turnover in the first quarter of 2024 is expected to be down slightly on the same period of the previous year. On the earnings side, Leifheit assumes that the significant increase in the prices for sea freight owing to the crisis in the Red Sea will continue to weigh on earnings in the first quarter in particular and for 2024 as a whole. At the same time, the projected turnover growth combined with cost-cutting and efficiency measures will likely have a positive effect on earnings. Against this background, the Board of Management expects Group EBIT in the range of EUR 10 million to EUR 12 million.

Alexander Reindler is optimistic as he looks to the year in progress: “In 2024, we will be revising our business strategy with a focus on profitable long-term growth and cost efficiency. To do that, our areas of focus will include targeted investments in the Leifheit brand and significantly ramped-up internationalization activity. We plan to continue to impress consumers going forward with durable products featuring high product quality and functional and aesthetic design. With this in mind, we will be concentrating on strengthening Leifheit’s ability to innovate and on getting even more consumers excited about our products by launching product innovations in our core segments of cleaning and laundry care. To further improve our cost efficiency, we plan to focus on using lean management practices to streamline our production and operational processes.”

The Leifheit Group’s full annual report 2023 is available online at https://www.leifheit-group.com/en/investor-relations/reports-and-presentations/

Latest images are available for download at https://www.leifheit-group.com/en/press/media-library/.

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.