Leifheit (LEI) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue rose 2.7% to €258.3m despite difficult economic conditions and weak consumption; gross margin improved 3.4 pp to 42.1%.

• EBIT increased €3.2m to €6.0m despite €2.7m in one-off costs related to Management Board changes; free cash flow rose €3.3m to €12.1m.

Financial highlights

• Revenue was €258.3m vs. €251.5m in FY 2022; gross margin reached 42.1% vs. 38.7%, reflecting price adjustments, favorable product mix and improved productivity and efficiency.

• EBIT increased to €6.0m from €2.8m; EBIT margin rose to 2.3% from 1.1%.

• Net income increased to €3.2m from €1.2m; EPS was €0.34 vs. €0.13.

• Adjusted for €2.7m of one-off Management Board transition costs and related expenses, EBIT benefited from successful campaigns for profitable products and higher gross margin.

Outlook and guidance

• FY 2024 revenue is forecast slightly above FY 2023; Household and Private Label turnover slightly above, while Wellbeing turnover is expected slightly below the prior year.

• FY 2024 EBIT is forecast at €10m–€12m and free cash flow at ~€10m.

• Revenue is expected to decline slightly YoY in Q1 2024; higher sea freight costs are expected to weigh on earnings, particularly in Q1 and across FY 2024.

• A 2024 strategy revision will target growth and cost efficiency through stronger brands, core-segment focus, innovation, European expansion, e-commerce and lean operations.