Leifheit AG · XETR:LEI
Leifheit — FY2019 Earnings Presentation
44 slides from Leifheit's earnings presentation, Mar 25, 2020
Slide 1: Investor and Analyst Conference Call
Investor and Analyst Conference Call 25 March 2020
Slide 2: Disclaimer
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 o
Slide 3: Welcome to the conference call
Welcome to the conference call Henner Rinsche Ivo Huhmann Marco Keul CEO CFO Vice President Finance • CEO of Leifheit AG since • Will leave the company at • Will be responsible for 01 June 2019 the end of his contract Finance, Controlling, • Will take over CFO 31 March 2020 IT/Business processes and
Slide 4: Executive summary
Executive summary - Good start in the 2020 financial year, particularly with the Household segment. - 2019 TV test market results and January till mid March 2020 global results confirm effectiveness of new strategy (i.e. growing sales of profitable blockbusters with successfully pre-tested TV advert
Slide 5: Agenda
Agenda • Introduction to Leifheit • Key Strategic Initiatives • Financial Figures 2019 • Forecast Financial Year 2020 • Annex Investor and Analyst Meeting Mar 2020 5
Slide 6: Introduction to Leifheit
Introduction to Leifheit
Slide 7: Solid base to build on
Introduction to Leifheit Solid base to build on Commitment to shareholders Strong products and brands in € 1.50 1,50 Dividend payments 1984 - 2019 1.00 1,00 0.50 0,50 0.00 0,00 Bonus/special dividend Dividend Strong financial structure Strong long-term stock performance in € m (reporting date 31/12)
Slide 8: Leifheit Group
Introduction to Leifheit Leifheit Group Household Wellbeing Private Label Kitchen Standing Laundry Care Cleaning Kitchen goods Personal scales Kitchen scales goods Dryers Wellbeing Rest of 9% World Kitchen 4% Germany Goods Laundry 40% 16% Care Eastern Turnover by 41% Europe Turnover product 13% by r
Slide 9: Introduction to Leifheit
Introduction to Leifheit Investor and Analyst Meeting Mar 2020 9
Slide 10: Present in leading distribution channels
Present in leading distribution channels Blue Chip client base Distribution channels Turnover in % (previous year’s figures) Electro Others 3 (3) 5 (5) Cash & Carry 3 (3) Hypermarkets Discounter 29 (30) 8 (8) Top 10 Customers Turnover 2019: account for 50% Importers/ € 234.0 m of Leifheit’s Exporter
Slide 11: Operating in more than 80 countries with 15 own branches
Introduction to Leifheit Operating in more than 80 countries with 15 own branches Paris/F (Leifheit/Birambeau) Nassau/D (Leifheit/Soehnle) • About 80 employees • About 320 employees • Marketing, sales • Marketing, sales, development, quality and administration assurance, central administration • Man
Slide 12: Urgent need for change
Introduction to Leifheit Urgent need for change Gross profit EBIT in € m in € m 109.9 102.1 101.0 18.8 13.1 9.9 -2% -7% -1% 20 -15% -31% -24% 12,00% 120 46.4% 18 43.6% 43.1% 45,0% 10,00% 16 100 8.0% 40,0% 14 8,00% 80 35,0% 12 10 5.6% 6,00% 30,0% 60 8 4.2% 25,0% 4,00% 40 6 20,0% 4 20 2,00% 15,0% 2 0
Slide 13: Key Strategic Initiatives
Key Strategic Initiatives
Slide 14: Our purpose? Happy consumers!
Key Strategic Initiatives Our purpose? Happy consumers! Better Value for Money Investor and Analyst Meeting Mar 2020 15
Slide 15: Increased Marketing Investments in Eastern Europe led to significant Growth Rates
Key Strategic Initiatives Increased Marketing Investments in Eastern Europe led to significant Growth Rates Consumer Marketing Spending Growth Rates in Relation to Turnover in % 11.3% 3,8% 3.0% 3.0% 6.8% 5.5%1 1.6% 1.1% 2.5% 0.7% 0.7% -4.1% 2017 2018 2019 2017 2018 2019 Germany Eastern Europe German
Slide 16: CEO's strategic review
Key Strategic Initiatives CEO’s strategic review Analysis of status quo Improvement initiative - identified strategy ➢ Increase revenues through pre-tested mass consumer advertising ▪ Flat revenues on profitable consumer-preferred best sellers ➢ Distribution in additional retail chains and high pote
Slide 17: New management identified strategy to address growth themes
Key Strategic Initiatives New management identified strategy to address growth themes Focus KPIs Growth Profitability Level of Completion 1 ● Invest in pre-tested and scalable high ROI consumer advertising 2019 2020 2020+ Create consumer on profitable best sellers Revenue demand ● Launch new product
Slide 18: Create consumer demand and make brand stronger
Key Strategic Initiatives 1 Create consumer demand and make brand stronger Marketing spend 2019 in % of turnover EBIT margin 25 20 Unilever1 15 Beiersdorf1 Adidas1 10 P&G1 5 Leifheit 0 Marketing spend 0 5 10 15 20 25 30 35 1 Source: Annual reports 2019 Investor and Analyst Meeting Mar 2020 19
Slide 19: Creating and pre-testing effective ads
Key Strategic Initiatives 1 Creating and pre-testing effective ads Investor and Analyst Meeting Mar 2020 20
Slide 20: Increase distribution
Key Strategic Initiatives 2 Increase distribution Turnover development Italy Household and Wellbeing in € m 7 -14% -5% +40% 6 5 4 3 2 1 0 2017 2018 2019 Investor and Analyst Meeting Mar 2020 21
Slide 21: Improve gross margin
Key Strategic Initiatives 3 Improve gross margin Focus on profitable Products Win-win retail negos Make in Europe Buy in Asia Sales deductions + promotional allowances in % of sales 1 23.8 23.2 21.8 21.6 22.0 Average contribution ~42% ~34% margin 1 2015 2016 2017 2018 2019 1 Household and Wellbeing
Slide 22: Boost profitability rockets
Key Strategic Initiatives 3 Boost profitability rockets Product A Product B Product C Product D… medium medium medium Contribution margin … medium medium medium Level of distribution … Quality and … consumer satisfaction Boost consumer marketing Investor and Analyst Meeting Mar 2020 23
Slide 23: High consumer satisfaction with Leifheit top products
Key Strategic Initiatives 3 High consumer satisfaction with Leifheit top products Profi Floor Wiper Clean Twist Pegasus 150 Linomatic 500 Deluxe 4.6 stars 4.5 stars 4.5 stars 4.4 stars Investor and Analyst Meeting Mar 2020 24
Slide 24: Reduce all cost except consumer advertising
Key Strategic Initiatives 4 Reduce all cost except consumer advertising % of Group Sales FY 2018 FY 2019 Further Outlook Consumer Marketing 0.7% 1.7% Other Marketing 5.4% 4.6% R&D 2.3% 2.4% Logistics 1 11.0% 11.5% Administration 6.1% 6.4% Cost of Turnover 56.4% 56.8% 1 not including inbound cost Inv
Slide 25: Financial Figures 2019
Financial Figures 2019
Slide 26: Key financial highlights
Financial Figures 2019 Key financial highlights 1 2 3 At EUR 234.0 million, Group EBIT at Successfully tested TV Group turnover on par EUR 9.9 million at upper campaigns in selected with previous year end of forecast range European countries 4 5 6 Turnover growth in Rising foreign sales make Focus o
Slide 27: Group turnover on par with previous year
Financial Figures 2019 Group turnover on par with previous year Group turnover by segment Group turnover by segment 2018 vs 2019 in € m 2019 234.2 234.0 Private 13.7% 260 77.8% Household Label 240 Wellbeing 8.5% Wellbeing 220 33.9 32.2 200 Private Label 19.9 19.8 180 Household 160 140 • Turnover in
Slide 28: Strong growth in TV-advertising test market Eastern Europe
Financial Figures 2019 Strong growth in TV-advertising test market Eastern Europe Group turnover by region Group turnover by region 2018 vs 2019 in € m 2019 120 101.3 3.6 % 100.7 2018 13.2 % 100 97.6 93.5 40.0 % Germany 2019 Central Europe 80 Eastern Europe 60 Rest of world 43.2 % 40 30.7 28.9 • Eas
Slide 29: Group EBIT at EUR 9.9 million at upper end of forecast range
Financial Figures 2019 Group EBIT at EUR 9.9 million at upper end of forecast range 2018 2019 ∆ Group turnover €m 234.2 234.0 -0.1% Gross margin % 43.6 43.1 -0.5 pps EBIT €m 13.1 9.9 -24.4% EBIT margin % 5.6 4.2 -1.4 pps Earnings before taxes (EBT) €m 11.9 8.5 -28.9% Net result for the period €m 8.4
Slide 30: Free Cash Flow significantly improved
Financial figures 2019 Free Cash Flow significantly improved in € m 2018 2019 ∆ Cash flow from operating activities 10.2 15.9 5.7 Cash flow from investment activities 22.5 -5.8 -28.3 Cash flow from financing activities -10.0 -10.7 -0.7 Change in cash and cash equivalents 8.7 -0.6 -11.5 Cash and cash
Slide 31: Forecast Financial Year 2020
Forecast Financial Year 2020
Slide 32: 2020: Gross margin increase from turnover growth will strengthen consumer advertising
Forecast Financial Year 2019 2020: Gross margin increase from turnover growth will be used to strengthen consumer advertising Economic ► Global economic slowdown due to increasing political and economic tensions environment ► Effects of Corona-pandemic currently not foreseeable 2020 ► Economic slowd
Slide 33: Annex
Annex
Slide 34: Long-term financial overview
Annex Long-term financial overview 2015 2016 2017 2018 2019 Group turnover €m 231.8 237.1 236.8 234.2 234.0 Profitability ▪ Gross margin % 46.7 47.5 46.4 43.6 43.1 ▪ Cash flow from operating activities €m 20.8 21.8 7.2 10.2 15.9 ▪ Free cash flow €m 14.1 14.3 1.5 3.7 10.1 ▪ EBIT €m 21.7 22.1 18.8 13.
Slide 35: Long-term financial overview
Annex Long-term financial overview 2015 2016 2017 2018 2019 Per share1 Net result for the period2 € 1.51 1.53 1.35 0.88 0.61 Free cash flow € 1.48 1.51 0.16 0.39 1.06 Dividend3 € 1.00 1.05 1.05 1.05 0.55 Special dividend € 0.38 0.40 -- -- -- Investments €m 7.1 7.8 7.8 6.6 6.0 Depreciation €m 5.8 6.2
Slide 36: Experienced management board
Annex Experienced management board Henner Rinsche Igor Iraeta Munduate CEO + CFO COO born 1970 born 1974 Previous experience Previous experience • President Europe at SodaStream • Many years of experience • Various leading positions at Henkel, as CTO at Igus GmbH and Stoba Danone, PepsiCo and Procte
Slide 37: Committed to shareholder returns
Annex Committed to shareholder returns Long-term dividend development Dividend yield 1 Dividend per share / in € 2019: 2.3% 2015: 5.6% 2018: 5.9% 2014: 3.9% 2017: 3.8% 2013: 5.3% 2016: 5.1% 2012: 5.2% 1,50 Proposal to the Annual General Meeting for 2019: 0.55 € 1,00 0,50 0,00 1998 1984 1985 1986 198
Slide 38: Leifheit awards (selection)
Annex Leifheit awards (selection) Rotary dryer Rotary dryers Laundry dryers LinoProtect 400 Linomatic Pegasus Floor wiper CLEAN TWIST Profi micro duo System Isolation jug Window vaccum Cordless vaccum Steam Mop Columbus cleaners Regulus PowerVac 2in1 CleanTenso Investor and Analyst Meeting Mar 2020
Slide 39: Soehnle awards (selection)
Annex Soehnle awards (selection) Kitchen Scale Kitchen Scale Kitchen Scale Luftbefeuchter Page Profi Page Profi 300 Genio White Airfresh Hygro 500 Body analysis scale Blood pressure monitor Luftreiniger Shape Sense Connect 200 Systo Monitor Connect 300 AirFresh Clean 300 und Clean Connect 500 Invest
Slide 40: Leifheit – 60 Years of passion
Annex Leifheit – 60 Years of passion for housework 2010 1984 • Sale of the business unit • IPO of Leifheit AG ‘bathroom’ including the brands Spirella, Kleine Wolke and Meusch 1988 2008 • License agreement for • Takeover of 60% of Dr Oetker Bakeware Herby/F • Acquisition of Spirella and Kleine Wolke
Slide 41: European competitors by category
Annex European competitors by category Cleaning Laundry care Spontex Brabantia Vileda Artweger Rival Tonkita Swiffer Juwel Wenko Gimi Stewi Vileda Metaltex Kärcher Rörets Blome Kitchen goods Wellbeing Tescoma WMF Laica Gefu Bosch Rösle Tanita Zyliss Lurch ADE Homedics Oxo Fackelmann Sanitas Beurer E
Slide 42: Significant free float and international investors
Annex Significant free float and international investors Shareholder structure March 2020 • MKV Verwaltungs GmbH, Grünwald (GER), 10.03% 10.03% • Joachim Loh, Haiger (GER), 8.26% 8.26% • Leifheit AG Nassau (GER), treasury shares, 4.91% 4.91% 45.69% • Alantra EQMC Asset Management, SGIIC, SA, Madrid
Slide 43: Financial calendar and contact
Annex Financial calendar and contact Dates 2020 Contact 13 May 2020 Corporate Communications / Investor Relations Quarterly statement for the period ending 31 March 2020 Phone: +49 2604 977-218 Email: [email protected] 13 Aug 2020 Financial report for the first half-year www.leifheit-group.com ending
Slide 44: Aktiengesellschaft Postfach 11 65 D-56377 Nassau
Aktiengesellschaft Postfach 11 65 D-56377 Nassau