Ad-hoc-Mitteilung nach § 15 WpHG - Leifheit AG: 1st half of 2011 shows continuing growth in turnover
• Turnover increased from € 107 million to € 111 million despite consumer
reticence in Europe
• Special effects lead to temporary decline in earnings
• Forecast for financial year 2011 confirmed
Nassau, 11 August 2011 – Leifheit AG presents its report today on the first half of 2011. The Group increased turnover significantly by 4%. However, a sharp rise in commodity prices and – particularly – currency effects from hedging procurement in US dollars led to a temporary decrease in earnings.
Group turnover increased
Leifheit grew its global turnover from € 107 million in the first half of 2010 to € 111 million, with domestic share rising from 45% to 46%. As a manufacturer concentrating exclusively on household products, Leifheit divides its business into the segments “Brand Business” (Leifheit, Dr. Oetker Bakeware, and Soehnle) and “Volume Business” (Birambeau, Herby and Project Business).
Brand Business growing steadily
The Leifheit, Dr. Oetker Bakeware and Soehnle brands increased turnover by around 3% to € 88 million (H1/2010: € 86 million). Growth in the Brand Business is primarily from the German market, where turnover increased to € 47 million (H1/2010: € 45 million). Foreign business continues to reflect the different economic conditions. The biggest growth drivers in Brand Business in the first half year were laundry care (7% growth in turnover) and wellbeing (9%).
Volume Business continues on the growth track
Volume Business increased turnover to € 23 million (H1/2010: € 21 million), an increase of over 10%. This was primarily due to sales promotion campaigns for laundry care products, which generated high growth rates. Growth of mid-price kitchen products also made a significant contribution here.
Currency effects and raw materials prices depress consolidated earnings
Group EBIT totalled € 3.4 million (H1/2010: € 7.7 million). The decrease in earnings, in contrast to the significant growth in turnover, is due to a number of special effects. These include unrealised currency losses of € 0.5 million from the measurement of foreign exchange forward contracts for the second half of 2011, which will be settled at year-end 2011. Foreign exchange forward contracts are used to hedge risks from the procurement in US dollars. In the previous year this effect had a positive impact on EBIT of € 2.1 million. In addition, there were other realised foreign currency losses from settled foreign exchange forward contracts and from the measurement of foreign currency positions in the balance sheet of € 1.1 million. This contrasts with other foreign currency gains of € 1.0 million in the previous year. Operating EBIT adjusted for foreign currency gains and losses increased to € 5.0 million (H1/2010: € 4.6 million).
Despite significantly higher commodity prices (particularly for plastics), adjustments to the product range made it possible to maintain the gross margin at the previous year’s level of 43.0% (H1/2010: 42.9%). However, this was offset by higher distribution costs, due to volume effects and expanded marketing activities.
EBT for the period ending 30 June 2011 was € 2.5 million (H1/2010: € 6.6 million), with net results for the period of € 1.7 million (H1/2010: € 5.5 million). The previous year’s income statement also included net results for the period of € 10.1 million from the former Bathroom Furnishings division, which brought earnings for the first half of 2010 to € 15.6 million.
Outlook for 2011: growth in turnover and earnings
Leifheit had a good first half of 2011 in terms of turnover, showing that the initiated growth strategy is bearing fruit. The new brand and marketing strategies will help leverage potential, particularly in the Brand Business. There will be visible effects in 2012, chiefly in the international sector.
By year-end Leifheit expects turnover to lie 3-5 % above the 2010 level. However, sharp rises in commodity prices and negative currency effects could significantly reduce the resulting growth in earnings. This is being countered by price adjustments for numerous products in the second half of 2011. Assuming a moderate increase in raw material prices, management accordingly still believes it will be able to report further growth in earnings over 2010, adjusted for currency effects.
Additional information is available in the interim report for the period ending 30 June 2011.