Leifheit AG · XETR:LEI
Leifheit — 9M 2022 Earnings Presentation
53 slides from Leifheit's earnings presentation, Nov 8, 2022
Slide 1: Investor Presentation 9M 2022
Investor Presentation 9M 2022
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: Multi-year economic slowdown with high input costs and depressed consumer demand
We anticipate a multi-year economic slowdown with high input cost (energy, raw materials) and depressed consumer demand Joint diagnosis of German economic institutes Energy price development Change in German GDP compared to prev. year in %, September 2022 Source: Börsen-Zeitung /Joint diagnosis of G
Slide 4: Charles Darwin quote on responding to change
„It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.“ Charles Darwin Investor Presentation November 2022 4
Slide 5: We cannot change macro-economic conditions
„We cannot change macro-economic conditions, but we can respond in a way that protects our profitability.“ Leifheit AG Investor Presentation November 2022 5
Slide 6: Preparing Leifheit AG for a few difficult years
Preparing Leifheit AG for a few difficult years, with the firm goal to produce positive EBIT every year - winning additional retail customers - double digit price increases - higher efficiency and productivity - process optimization - cost reduction - structural downsizing Investor Presentation Nove
Slide 7: Some examples of our crisis response plan
Some examples of our crisis response plan Streamlining portfolio and substantial SKU reduction Group synergies in purchasing and logistics Enhancing Direct-to-Consumer Selling & Shipping Reduce transport cost & CO2 emissions through Western Europe Logistics Center Lean manufacturing and cost saving
Slide 8: Executive Summary 9M 2022
Executive Summary 9M 2022 Leifheit AG has a strong vision: to become the Procter & Gamble of consumer durables “Scaling-Up Success” strategy with focus on consumer marketing and superior products Vision and strategy deliver great results: 2019-2021 CAGR turnover +11% and EBIT +43% However, 2022 is s
Slide 9: Leifheit makes top quality household products, designed in Germany
Leifheit makes top quality household products, designed in Germany Profi Floor Wiper CLEAN TWIST Disc Mop Ergo Pegasus 150 Linomatic 500 Deluxe 4.7 stars 4.6 stars 4.6 stars 4.5 stars Investor Presentation November 2022 9
Slide 10: Leifheit is financially solid and pays good dividends to shareholders
Leifheit is financially solid and pays good dividends to shareholders Commitment to shareholders Strong products and brands 1.50 1,50 Dividend payments 1984 - 2021 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€ in % A
Slide 11: Turnover in 9M 2022 higher than all 9M in 2007-2019
Turnover in 9M 2022 higher than all 9M in 2007-2019 Group turnover development by quarters in m€ 300,0 +6% +16% ▪ Group turnover in 9M 2022 remains 63 at a comparatively high level and 250,0 still around 9% higher than in the 70 pre-COVID-19 year 2019. 58 59 57 57 -14.2% ▪ High comparative values i
Slide 12: Positive EBIT despite challenging market prices
Positive EBIT despite challenging market prices in raw materials, energy and freight Group earnings development 9M 2021 9M 2022 ∆ 9M 2018 – 9M 2022 in m€ Group turnover1 m€ 225.3 193.2 -14.2% Gross margin % 42.5 38.4 -4.1 pps Foreign currency result m€ 0.6 3.8 >100.0% 20 18 16.6 EBIT m€ 16.6 3.2 -80
Slide 13: 2022 Q3 sees return to positive EBIT and strong cash generation
2022 Q3 sees return to positive EBIT and strong Cash generation Q1 2022 Q2 2022 Q3 2022 Jan.-Sept. 2022 EBIT €m 2.7 -0.5 1.0 3.2 Gross Margin % 40.9 36.0 37.9 38.4 Free cash flow €m -15.6 5.1 12.5 2.0 Investor Presentation November 2022 13
Slide 14: Free cash flow increases by m€ 12.5 in the third quarter of 2022
Free cash flow increases by m€ 12.5 in the third quarter of 2022 in m€ 9M 2021 9M 2022 ∆ Cash flow from operating activities 11.2 6.1 -5.1 Cash flow from investment activities -4.0 -4.0 - Cash flow from financing activities -10.3 -10.5 -0.2 Free cash flow1 7.1 2.0 -5.1 in m€ 30/09/2021 30/09/2022 ∆
Slide 15: Free cash flow and group liquidity
Free cash flow increases by m€ 12.5 in the third quarter of 2022 Group liquidity 31/12/2021 vs. 30/09/2022 in m€ • Working capital up by m€ 1.9 compared to +3.4 +2.5 31.12.2021 +5.6 38.1 +2.2 +0.5 • Trade receivables down by m€ 2.5 -8.1 -4.1 -0.3 29.8 • Decrease of m€ 3.4 in inventories -10.0 • Decr
Slide 16: Our purpose? Happy consumers!
Our purpose? Happy consumers! Better Value for Money Investor Presentation November 2022 16
Slide 17: We call our strategy Scaling up Success
We call our strategy “Scaling up Success” Focus KPIs 2019 vs. 2021 Growth Profitability 1 • Invest in pre-tested and scalable high ROI consumer advertising Create consumer ✓ on profitable best sellers Revenue growth demand • Launch new products only if margin > average and if supported by pre-tested
Slide 18: Create consumer demand and make brands stronger
1 Create consumer demand and make brands stronger Peer group comparison Marketing spend and EBIT in % of turnover EBIT margin 25,0 P&G1 20,0 15,0 Unilever1 10,0 Beiersdorf 1 Leifheit 2021 5,0 Leifheit 2019 0,0 0 5 10 15 20 25 30 35 40 Marketing spend 1 Source: Annual reports 2021 Investor Presentati
Slide 19: Massive TV advertising investments turned Leifheit & Soehnle into winning brands
1 Our massive investments in TV advertising have turned Leifheit & Soehnle into winning brands Leifheit & Soehnle Leifheit & Soehnle Group EBIT Gross spending for advertising Turnover development m€ m€ m€ 40 37 260 256 20.1 0 18.8 35 31 TV advertising 240 30 240 works! 0 25 20 220 9.9 0 15 202 10 20
Slide 20: Electricity Savers campaign encourages power-free laundry drying
1 “Electricity Savers” campaign encourages consumers to switch to power-free laundry drying • Current market situation provides the chance to further promote our energy-saving, durable products. • In face of rising energy prices, many households are currently looking for ways to reduce their energy
Slide 21: Electricity Savers campaign encourages power-free laundry drying
1 “Electricity Savers” campaign encourages consumers to switch to power-free laundry drying Strong increasing prices for electricity is stressing the household budget. Now and for the years to come. One solution: drying laundry without electricity. Per household: • Reduction of carbon emissions up t
Slide 22: Our most long-lasting products campaign aims for sustainability
1 „Our most long-lasting products“ campaign aims for sustainability High quality and along with it long life cycle products belong to the DNA of the Leifheit brand. A major part of our assortment is being produced in Europe in our own factories where we have full quality control. Strongly convinced
Slide 23: Further enhancements of efficient cleaning appliances range
1 Further enhancements of successful efficient cleaning appliances range accompanied by intensive marketing efforts • New Regulus Aqua PowerVac Pro, which vacuums, mops and dries all in one, can reach into every corner thanks to its new corner glider with Micro-Duo wipe cover. • New Clean Tenso Powe
Slide 24: We are successfully expanding our distribution network
2 We are successfully expanding our distribution network New customers in CZ and SK in 2022 Investor Presentation November 2022 24
Slide 25: International expansion: German heritage products ranked #1
3 International expansion: German heritage products are ranked # 1 for consumers in terms of positive image Source: Statista Made-In-Country-Index 2017 • Germany leads the Made-in-Country-Index • The global ranking according to the Made-In-Country-Index shows how positively products “Made in ...” fr
Slide 26: International expansion: German heritage products ranked #1
3 International expansion: German heritage products are ranked # 1 for consumers in terms of positive image German heritage products are ranked #1 Two communication options according to for consumers in terms of positive image production site of the advertised product High quality, engineering, high
Slide 27: We create a fun, fast, friendly and fearless winning culture
4 We create a fun, fast, friendly and fearless winning culture Investor Presentation November 2022 27
Slide 28: 26% increase in turnover per employee FY 2021 vs. FY 2019
4 26% increase in turnover per employee FY 2021 vs. FY 2019 Group turnover per employee 2018 - 2021 in k€ 267 247 212 209 2018 2019 2020 2021 Investor Presentation November 2022 28
Slide 29: Forecast 2022: Turnover forecast adjusted, EBIT forecast confirmed
Forecast 2022: Turnover forecast slightly adjusted, EBIT forecast confirmed Forecast 2022 Group turnover Decrease in the lower double-digit percentage range Turnover Household Decrease in the lower double-digit percentage range Turnover Wellbeing Decrease in the clear double-digit percentage range T
Slide 30: Summary
Key Strategic Initiatives Summary – It’s a perfect storm • High comparative values in record year 2021 • Enormous procurement cost increases for raw materials, energy and freight • Inflation, consumer uncertainty and reluctance to buy in our key markets • Suffering economies and Euro weakness and p
Slide 31: Investor Presentation 9M 2022
Investor Presentation 9M 2022 November 2022 31
Slide 32: Annex
Annex
Slide 33: Household segment turnover below record prior-year
Annex Household segment turnover below record prior-year, but at high level compared to pre-COVID-19 level Group turnover by segment Group turnover by segment 9M 2018 – 9M 2022 in m€ 9M 2022 11.7% Household 6.1% Wellbeing 225 202 Private Label 23 193 200 177 177 22 20 22 82.2% 23 22 19 12 150 14 14
Slide 34: Group turnover by region
Annex Successful TV advertising campaigns are paying off, but Russia- Ukraine war and continuing inflation weigh on private consumption Group turnover by region Group turnover by region 9M 2018 – 9M 2022 in m€ 9M 2022 225 2.9% 12.5% 202 6 41.6% Germany 193 27 200 9 177 177 6 Central Europe 25 24 5 6
Slide 35: Leifheit Group structure
Annex Leifheit Group structure Household Wellbeing Private Label Kitchen Laundry Care Cleaning Kitchen goods Personal scales Kitchen scales Standing Dryers goods Wellbeing 9% Rest of World 3% Kitchen Goods Germany Laundry Care 14% Eastern 44% 38% Turnover by Europe Turnover product 13% by region cat
Slide 36: European production footprint ensured reliable supply
Annex Our European production footprint ensured reliable supply to customers in spite of challenges in the supply chain Paris/F (Leifheit/Birambeau) Nassau/D (Leifheit/Soehnle) • About 70 employees • About 280 employees • Marketing, sales • Marketing, sales, development, quality and administration a
Slide 37: Distribution in all relevant distribution channels
Annex Distribution in all relevant distribution channels Blue Chip client base Distribution channels Turnover 2021 in % (previous year’s figures) Electro Others 3 (3) 5 (6) Cash & Carry 3 (3) Hypermarket Importers/ 26 (27) Exporters Top 10 7 (8) Customers account for 50% Turnover 2021: of Leifheit’s
Slide 38: Flexible reaction to changed capacity utilization
Annex We were able to react flexibly to the changed capacity utilization in production and logistics by reducing remaining vacation time and credits on working time accounts and by cutback in the numbers of temporary workers Employee development Employees by region 30 June 2022 30 June 2022 Private
Slide 39: The strategy works: 2019 to 2021 CAGRs
Annex The strategy works: 2019 to 2021 shows CAGRs of +11% on turnover and +43% on EBIT Group turnover Group EBIT in m€ in m€ ~11 % -23 % -0.4 % CAGR 22.1 CAGR 300 CAGR 288 272 20.1 20 18.8 18.8 250 237 237 234 234 15 ~43% 200 13.1 CAGR 150 9.9 10 100 5 50 0 0 2016 2017 2018 2019 2020 2021 2016 2017
Slide 40: Scaling-Up Success tested in the Netherlands
Annex Scaling-Up Success, i.e. heavy TV ad spend, was tested before COVID-19 in the Netherlands with remarkable results Turnover development Netherlands in % +43% 45 35 +21% 25 15 5 -5 -15 -11% 9M 2019 Q4 2019 Q1 2020 Investor Presentation November 2022 40
Slide 41: Long-term financial overview
Annex Long-term financial overview 2017 2018 2019 2020 2021 Group turnover m€ 236.8 234.2 234.0 271.6 288.3 Profitability ▪ Gross margin % 46.4 43.6 43.1 45.0 42.3 ▪ Cash flow from operating activities m€ 7.2 10.2 15.9 4.0 16.4 ▪ Free cash flow m€ 1.5 3.7 10.1 -5.5 9.6 ▪ EBIT m€ 18.8 13.1 9.9 18.8 2
Slide 42: Long-term financial overview
Annex Long-term financial overview 2017 2018 2019 2020 2021 Per share Net result for the period, EPS2 € 1.35 0.88 0.61 1.32 1.49 Free cash flow € 0.16 0.39 1.06 -0.57 1.00 Dividend € 1.05 1.05 0.55 1.05 1.052 Special dividend € -- -- -- -- -- Investments m€ 7.8 6.6 6.0 9.6 7.3 Depreciation m€ 6.4 6.
Slide 43: Experienced Management
Annex Experienced Management Henner Rinsche Igor Iraeta Munduate Marco Keul CEO COO CFO Previous experience Previous experience Previous experience • President Europe at • Many years of experience as • Resp. for Controlling, IT/Business SodaStream CTO at Igus GmbH and Stoba processes and internal sa
Slide 44: Dividend for 2021: € 1.05
Annex Committed to shareholder returns Long-term dividend development Dividend yield 1 Dividend per share / in € 2021: 2.9% 2017: 3.8% 2020: 2.4% 2016: 5.1% 2019: 2.3% 2015: 5.6% 2018: 5.9% 2014: 3.9% 1,50 Dividend for 2021: € 1.05 1,00 0,50 0,00 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 199
Slide 45: Leifheit awards (selection)
Annex Leifheit awards (selection) Floor wiper Profi micro duo Rotary dryers Laundry dryers Linomatic Pegasus Cordless vaccum wiper Regulus Aqua PowerVac CLEAN TWIST Disc Mop Ergo Window vaccum Window vaccum CLEAN TWIST cleaner Nemo cleaners M Ergo Salad spinner Cordless vaccum Isolating jug Isolatin
Slide 46: Soehnle awards (selection)
Annex Soehnle awards (selection) Kitchen Scales Personal Scales Page Profi + Page Profi 300 Style Sense Personal Scales Page Aqua Proof Style Sense Bamboo Magic Kitchen Scale Air Purifier Body analysis scales Blood pressure monitors AirFresh Clean 400 Shape Sense Connect 100 + 200 Systo Monitor 200
Slide 47: Leifheit – more than 60 years of passion for housework
Annex Leifheit – more than 60 years of passion for housework 2010 1984 • Sale of the business unit ‘bathroom’ • IPO of Leifheit AG 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 Kl
Slide 48: 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 Rörets Kärcher Blome Kitchen goods Wellbeing Tescoma WMF Gefu Bosch Laica Tanita Zyliss Rösle Oxo Lurch ADE Homedics Fackelmann Sanitas Beurer B
Slide 49: Significant free float and international investors
Annex Significant free float and international investors Shareholder structure November 2022 • MKV Verwaltungs GmbH, Grünwald (GER), 10.03% 10.03% • Ruthild Loh, Haiger (GER), 8.26% 8.26% • Leifheit AG Nassau (GER), treasury shares, 4.85% 4.85% • Employee shares subject to a lock-up period 44.12% 0.
Slide 50: Leifheit is frequently top company in home appliances categories
Annex Leifheit is frequently top company in home appliances and household goods categories Most Valuable Germany‘s Highest Level Germany‘s Best Company fairest companies of Trust 2021 Customer Hotline 2021 July 2021 Jan 2022 Oct 2021 July 2021 Deutschland Test / Focus Money IMWF Institut / FAZ-Insti
Slide 51: Our ESG Principles
Our ESG Principles Read more at our sustainability report 2021 www.leifheit-group.com/en/investor- relations/reports-and-presentations/ Investor Presentation November 2022 51
Slide 52: Financial calendar and contact
Annex Financial calendar and contact Dates 2023 Contact 29 March 2023 Corporate Communications / Investor Relations Publication of Annual Reports 2022, Sustainability Report Phone: +49 2604 977-218 incl. Non-Financial Report 2022; Analyst Conference Email: [email protected] 11 May 2023 Publication Qua
Slide 53: Aktiengesellschaft Postfach 11 65 D-56377 Nassau
Aktiengesellschaft Postfach 11 65 D-56377 Nassau