Leifheit (LEI) Q2 2024 earnings summary

Executive summary

• H1 turnover was €135.0m, down 2.2% YoY; Q2 returned to growth of 1.9% as catch-up sales emerged.

• EBIT increased 47.5% to €7.0m, supported by higher gross margin, favorable mix, and productivity and efficiency gains.

• A new strategy targets profitable growth, cost efficiency, and European leadership in mechanical cleaning and drying, with focus on innovation, e-commerce, and streamlined operations.

Financial highlights

• Gross profit rose €3.4m to €59.9m despite lower turnover; gross margin expanded 3.5pp to 44.4%.

• EBT rose 69.7% to €6.7m; net result increased 78.0% to €4.7m and EPS rose to €0.50 from €0.28.

• Operating cash flow was €11.7m versus €10.8m; free cash flow rose 29.5% to €9.9m, supported by improved working capital and lower inventories.

• Distribution costs rose €2.4m to €41.9m, including €1.4m in strategy-related restructuring effects and €1.2m in higher outbound freight costs.

• Investing activities used €1.8m and financing activities used €11.0m; other operating income included €0.5m patent-infringement compensation.

Outlook and guidance

• FY 2024 EBIT guidance increased to €11m–€13m from €10m–€12m; free cash flow guidance rose to ~€12m from ~€10m.

• Turnover guidance was confirmed at slight growth, with H2 expected to be stronger; Household and Wellbeing are forecast slightly above 2023 and Private Label slightly below.

• Advertising for high-margin bestsellers, distribution expansion in core European markets, and product innovations are expected to support H2 turnover; PowerClean launched in July.

• Weak economic conditions, subdued consumer sentiment, and higher container freight rates are expected to weigh on H2.