Leifheit AG · XETR:LEI
Leifheit — Q1 2020 Earnings Presentation
47 slides from Leifheit's earnings presentation, May 13, 2020
Slide 1: Investor Presentation Q1 2020
Investor Presentation Q1 2020 Henner Rinsche (CEO/CFO), Marco Keul (Vice President Finance) 13 May 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 Agenda • Executive Summary • Introduction to Leifheit • Key Strategic Initiatives Henner Rinsche • Financial Figures 3M 2020 CEO + CFO • Annex Marco Keul Vice President Finance Investor Presentation Q1 2020 May 2020 3
Slide 4: Good 1st quarter despite Covid-19 retail shut-downs
Management Summary Good 1st quarter despite Covid-19 retail shut-downs • 2019 Q4 and 2020 Q1 TV advertising test market results confirm new scaling-up success strategy • Corona crisis affects business, especially 2nd half of March and 2nd quarter. - Supply interruptions, e.g. products from China and
Slide 5: Increased turnover and EBIT despite Covid-19
Management Summary Increased turnover and EBIT despite Covid-19 3M 2019 3M 2020 ∆ Group turnover €m 64.3 68.7 6.8 % Gross margin % 42.9 44.7 1.8 pps EBIT adjusted for foreign currency result €m 3.4 4.4 30.3 % Foreign currency result €m 0.5 -0.2 >- 100 % EBIT €m 3.9 4.3 9.4 % EBIT margin % 6.0 6.2 0.
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 in % Assets Liabilitie
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 Presentation Q1 2020 May 2020 9
Slide 10: Fortunately hypers & discounters stayed open during Covid-19 retail shut-downs
Fortunately hypers & discounters stayed open during Covid-19 retail shut-downs 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% Impor
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: Can we change it? Yes we can!
Introduction to Leifheit Can we change it? Yes we can! Gross profit EBIT in € m in € m 109.9 102.1 101.0 27.6 30.7 18.8 13.1 9.9 3.9 4.3 -2% -7% -1% -1% +11% -15% -31% -24% -17% +9% 20 12,00% 46.4% 43.6% 44,7% 18 120 43.1% 42,9% 45,0% 10,00% 16 100 40,0% 14 8.0% 8,00% 35,0% 12 6,2% 80 6,0% 30,0% 10
Slide 14: Key Strategic Initiatives
Key Strategic Initiatives
Slide 15: Our purpose? Happy consumers!
Key Strategic Initiatives Our purpose? Happy consumers! Better Value for Money Investor Presentation Q1 2020 May 2020 15
Slide 16: Successful TV campaigns boost turnover growth in the relevant markets in Q1 2020
Successful TV campaigns boost turnover growth in the relevant markets in Q1 2020 Turnover development selected TV markets Group turnover in € m +43% +49% +44% +39% +50% Netherlands Belgium Switzerland Poland Romania Investor Presentation Q1 2020 May 2020 16
Slide 17: CEO's strategic review
Key Strategic Initiatives CEO’s strategic review Analysis of status quo 2019 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
Slide 18: Scaling up success strategy
Key Strategic Initiatives Scaling up success strategy 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 products only if margin Concept Realisa
Slide 19: 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 Presentation Q1 2020 May 2020 19
Slide 20: Creating and pre-testing effective ads
Key Strategic Initiatives 1 Creating and pre-testing effective ads Investor Presentation Q1 2020 May 2020 20
Slide 21: 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 Presentation Q1 2020 May 2020 21
Slide 22: 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 23: 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 Presentation Q1 2020 May 2020 23
Slide 24: 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 Presentation Q1 2020 May 2020 24
Slide 25: Reduce all cost except consumer advertising
Key Strategic Initiatives 4 Reduce all cost except consumer advertising % of Group FY 2018 FY 2019 3M 2019 3M 2020 Change Sales Consumer Marketing 0.7% 1.7% 0.8% 5.0% +4.2pp ✓ Other Marketing 5.4% 4.6% 5.3% 3,8% -1.5pp ✓ R&D 2.3% 2.4% 2.2% 1.7% -0.5pp ✓ Logistics 1 11.0% 11.5% 10.5% 9.8% -0.8pp ✓ Ad
Slide 26: Reduce all cost except consumer advertising: Excellence Programme
Key Strategic Initiatives 4 Reduce all cost except consumer advertising Continuously working on an Excellence Programme to reduce complexity and costs: - Operational excellence • Projects to reduce Logistic costs • Streamlining portfolio and SKU reduction by approx. 40 % • Ratio projects to improve
Slide 27: Financial Figures 3M 2020
Financial Figures 3M 2020
Slide 28: Key financial highlights
Financial Figures 3M 2020 Key financial highlights 1 2 3 Turnover Household segment Double-digit turnover up by 6.8% 9.3 % up behind growth in Central Europe, Q1 TV campaigns Eastern Europe and Rest in 10 countries of World 4 5 6 EBIT Gross margin improved by Negative cash flow mainly growth of 9.4
Slide 29: Strong growth in Household and Wellbeing segments
Financial Figures 3M 2020 Strong growth in Household and Wellbeing segments Group turnover by segment Group turnover by segment 3M 2019 vs 3M 2020 in € m 3M 2020 64.3 68.7 Private 8.1 % 80 82.9 % Household Label 9.0 % Wellbeing Wellbeing 5.6 Private Label 60 7.0 6.2 5.2 Household 40 • Turnover in th
Slide 30: Successful TV-advertising campaigns result in increased demand
Financial Figures 3M 2020 Successful TV-advertising campaigns result in increased demand Group turnover by region Group turnover by region 3M 2019 vs 3M 2020 in € m 3M 2020 35 3.2 % 28.2 14.0 % 3M 2019 Germany 30 28.8 28.7 41.8 % 3M 2020 25.2 Central Europe 25 Eastern Europe 20 Rest of the 41.0 % wo
Slide 31: Increased turnover and EBIT
Financial Figures 3M 2020 Increased turnover and EBIT 3M 2019 3M 2020 ∆ Group turnover €m 64.3 68.7 6.8 % Gross margin % 42.9 44.7 1.8 pps EBIT adjusted for foreign currency result €m 3.4 4.4 30.3 % Foreign currency result €m 0.5 -0.2 >- 100 % EBIT €m 3.9 4.3 9.4 % EBIT margin % 6.0 6.2 0.2 pps Earn
Slide 32: Negative cash flow mainly due to turnover-related increase in receivables
Financial figures 3M 2020 Negative cash flow mainly due to turnover- related increase in receivables in € m 3M 2019 3M 2020 ∆ Cash flow from operating activities 0.1 -9.6 -9.7 Cash flow from investment activities -0.9 -1.6 -0.7 Cash flow from financing activities -0.2 -0.2 0 Change in cash and cash
Slide 33: Group liquidity affected by growth-related increase in receivables
Financial figures 3M 2020 Group liquidity affected by growth-related increase in receivables Group liquidity 31.12.2019 vs 31.03.2020 in € m 2.0 50.3 2.9 • Higher increase in 1.7 3.2 39.0 trade receivables as a result of turnover growth -17.2 -1.6 -2.3 (Q1 2019: increase € 11.6 m) 50,3 53,2 • No not
Slide 34: Forecast Financial Year 2020
Forecast Financial Year 2020
Slide 35: Challenging market environment due to the exceptional economic situation
Forecast Financial Year 2020 Challenging market environment due to the exceptional economic situation – effects of the COVID19 pandemic on business development in 2020 still not assessable Economic ► IMF: Global economy faces worst economic downturn since environment 1930s depression 2020 ► European
Slide 36: Annex
Annex
Slide 37: 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 38: 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 39: Experienced Management
Annex Experienced Management Henner Rinsche Igor Iraeta Munduate Marco Keul CEO + CFO COO Vice President Finance Previous experience Previous experience Previous experience • President Europe at • Many years of experience • Responsible for Finance, SodaStream as CTO at Igus GmbH and Controlling, IT/
Slide 40: 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 41: 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 Presentation Q1 2020 May 2020
Slide 42: 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 43: 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 • 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 Kl
Slide 44: 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 45: Significant free float and international investors
Annex Significant free float and international investors Shareholder structure April 2020 • Joachim Loh, Haiger (GER), 10.31 % 10.31 % • MKV Verwaltungs GmbH, Grünwald (GER), 10.03 % 10.03 % • Leifheit AG Nassau (GER), treasury shares Aktien, 4.91 % 43.37% • Alantra EQMC Asset Management, SGIIC, 4.9
Slide 46: Financial calendar and contact
Annex Financial calendar and contact Dates 2020 Contact 13 Aug 2020 Corporate Communications / Investor Relations Financial report for the first half-year ending 30 June 2020 Phone: +49 2604 977-218 Email: ir@leifheit.com 30 Sep 2020 Virtual Annual General Meeting in accordance www.leifheit-group.co
Slide 47: Aktiengesellschaft Postfach 11 65 D-56377 Nassau
Aktiengesellschaft Postfach 11 65 D-56377 Nassau