Earnings Call: Q2 2026

Aug 6, 2026

Summary

H1 turnover fell 5.8% in a contracting market, while gross margin improved to 46.2%; EBIT was -€2.7m. FY guidance is break-even EBIT and free cash flow, with FOCUS savings and brand initiatives supporting longer-term growth.

Ladies and gentlemen, thank you very much for joining us for Leifheit's conference call on the business performance in the first half of 2026. First, the management team will present you financial figures and important strategic initiatives. Afterwards, you will have the opportunity to ask questions direct. Please note that this conference call will be recorded. I will now hand over to CEO Alex Reindler and CFO Marco Keul for the presentation. Mr. Reindler, please go ahead. Yeah, thank you very much, Mr. Bohus. Dear ladies and gentlemen, a big welcome to our investor call for the half year results 2026. Welcome, and thank you very much for joining the session. As usual, we will go through an update on the key numbers on the financials. Marco Keul will take over and at the end we will close as usual with an update on the strategy and on the strategic initiatives. Let me start with the summary. Here you see first six months developments and main initiatives. First of all, obviously a very challenging market environment. On the other hand, we have been investing into the brand in the first half of the year as part of the start of the brand's relaunch. You see turnover minus 5.8%, obviously not aligned with our initial expectations, reflecting the challenging market environment. On the market data, on the market share we have been receiving actually just yesterday, we see that reflected in the market in terms of market decrease. On the other hand, we have been gaining market share in the first half in our key category. On gross margin, you see I think another great improvement on gross margin. We have been talking about this throughout the last three years. I think a continuous advancement and improvement. On the other hand, in terms of efficiency, we have now been communicating and launching our FOCUS program to really transform Leifheit into a simpler, faster, more customer-centric organization, and therefore strengthening our competitiveness and profitable growth. As a result of mainly the marketing investment, you see an EBIT of EUR -2.7 million for the first half. With the adjustments or with the investments of the restructuring program and the net sales development, we have been adjusting our forecast for 2026. So there we are now stating that turnover will be slightly below previous year and EBIT will be same as free cash flow on zero due to the adjustments on the restructuring program on the FOCUS program. If we start with the consumer, as usual, we see that consumer sentiment continues to be weak. No big improvements here. Different by markets. In some markets, we also sense the decline in the customer or shopper traffic. As I said, we see the markets or this consumer sentiment within the market decline. We measure two markets now, manual cleaning and also drying. Our two categories, the drying actually in Germany only for the first time. These markets are reduced by 5%-6%, in fact. We see even a market decline in quarter two by 8%. All the negative impact on the Middle East escalation and on the higher fuel prices we see reflected in the market. This is the consumer sentiment. If we now have a look at the turnover development, you see that obviously the weak market conditions are reflected, although they are outrating the targeted marketing initiatives which we had in the first four to five months of the year. You see the group negative by the minus 5.8, which you have seen before. Household is slightly more negative. Main impact here, also overall the discounter channel. Specifically Lidl and Aldi and the hypermarket Kaufland. These are the three most challenging customers. Discounters partly because they go on a private label strategy given the environment, specifically Aldi. Kaufland more because overall, not only Leifheit, but overall they have been coming into the year with higher stock level than usual. So they were reducing promotions and pushing these higher stocks through their promotional aisles or also the standard shelves. These are the three main impacts overall but specifically here in the household. On wellbeing, you see that our Soehnle brand, as you know, we have similar impacts here. They weigh a bit stronger, especially on one of the discounters. But there in the outlook, we are a bit more positive because we have been recovering some of the promotions, so therefore we expect this in the second half to be better. On private label, you see a very good development, 6%, which primarily comes from our. We have two French subsidiaries here, Birambeau and Herby. The very positive development comes especially by Herby due to stronger promotions and also better promotions working better in terms of sellouts. Overall, a very good development. Birambeau is also on last year's level. So you see there that the private label segment is performing stronger than the branded segment in the environment we are in. We see that also in the Leifheit market data reflected. If we now have a look at the different regions, you see also here the impact of the customer I was mentioning, especially on Germany, because these customers are very strong in Germany. So these are the discounters in Kaufland, and you see therefore minus 9.2% in the German business. The other regions performing slightly better than average. As a result, Central Europe with minus 3.7. Actually, some of the markets developed on last year level or slightly growing. That's Belgium, Austria, Switzerland, Netherlands. All where we have stronger brand equity, that helps in the environment we are in. On the other hand, slightly below that number, is Spain and Denmark, where we have a slight higher decrease. But the pattern is more in markets with better brand value, with stronger brand awareness. And we have a couple of these strong markets. The development is much more resilient. On Eastern Europe, therefore, similar picture. But here, we are very happy with the development in Poland. One of our definitely growth markets developed in the mid single digit positive. On the other hand, Czech, as last year, still a very challenging market in terms of consumer sentiment to a certain extent, but also in terms of promotional pressure. So Czech below that number. Then, you have the small part, rest of the world, so outside Europe, where we have a mixed bag. It is slightly positive, but the number overall is obviously small, driven a bit by the U.S. where we have a small business. You see the different quarters developing. After quarter one, where we had a minus 4% in net sales, we unfortunately saw a stronger decrease also on a stronger decrease in 2025, so therefore definitely below our expectations very clearly. We see that same development in the market development. The markets developed in quarter two around minus 8%, so even stronger negative than for the first half, as I mentioned. Therefore reflected obviously, I think one part is for sure petrol pricing and therefore more hesitant consumers when it comes to purchase. Overall, if we see core and non-core, you know we have a very reliable core business with a CAGR over the last 10 years, three times the company growth, 4% CAGR. This year, you see here core and non-core, relatively similar. It is of course, a picture we do not necessarily like. But on the other hand, we also now reduced some of the non-core businesses last year. On the other hand, we also see that the market in our core categories, as I said, are impacted. On the other hand, we also have some of the discounter activities which we have not had in the first half. We are slightly more positive on that for the second half. Therefore, also, we are more positive, especially on that channel, to achieve our outlook when it comes to a better performance that we expect year to growth performance on last year level. One of the drivers is also a discounter where we have gained some activities versus 2025, which makes us confident. If we have a look at the distribution channels, I think we see a very interesting picture which shows a different development by channel. You see here especially strong growth in the DIY channel, 7.5% growth. We are very happy with that. We have been developing that channel very actively. As you know, you see that this is one of our three top channels. It is also the natural channel of Leifheit as a higher quality brand. We make a good progress in France, in Spain, also in Germany, especially OBI, for instance, as one customer, where we had a very good customer engagement, which led to the 7.5% growth in DIY. We are talking about B2C, of course, a lot if it comes to e-commerce. We have very good capabilities, and we see a very strong growth there, 33%. So you will ask, how come? A main part of that growth is really that we are taking over more products from the B2B vendor relationship with Amazon. This has simply the background that Amazon is driving a lot profitability, and so they are not pushing all our products. In that case, we are flexible with our seller accounts, take these products on, and that reflects a very strong growth. But also other marketplaces are developing very positively. On B2C, we are very happy with the development, and we expect that also to be continued in the second half. Again, was always a strategic driver for us, so very good to see that we move strongly there. Hypermarket is more or less in line with the average. Discount, I have been talking about discounts already three, four times, I think, in the last 10 minutes. It is definitely a channel which is challenging for the category overall, so also for our competitors, but remains obviously an important channel for us as well to reach consumers and to reach interesting price points as well. As I said, we are quite positive for the year to go with some agreed promotions already. This from my side so far, I am back in a moment. Now I hand over all the financials to Marco. Right. Thanks, Alex. Let me briefly guide you through our financials for the first quarter, because, after that, we will get to our strategy update, outlook for the rest of the year and our Q&A session. Looking at our P&L, it is worth mentioning that, despite our decline in turnover, we were able to improve our gross margin in the first half of the year, but in Q2 as well. Compared to our gross margin before special items from last year, meaning our strategic optimization projects in production, we are up by nearly one percentage point, and we achieved that despite the fact that we had already negative impacts because of price increase of raw materials and energy. Unfortunately, we expect that situation to become worse in the second half of the year, which made it necessary to negotiate sales price increases in Q2 that will become effective mostly during Q3. We will look at the development since 2022 on the next slide. Unfortunately, our margin improvement and our cost savings were not able to fully cover the negative effects in other areas. The increase was primarily driven by additional marketing activities, increasing costs by additional marketing activities with investments exceeding the previous year's level by a mid-single digit million EUR amount, increased freight out because of the D2C growth and the high fuel prices, and additional costs for strategic projects such as the FOCUS projects we will come to later. On top of that, we had EUR 1 million other operating income in 2025 because of a patent infringement, which is clearly a one-off. All combined, our EBIT in the first half of 2026 is -2.7, meaning that we are break even in the second quarter. Our strong margin improvement still goes on in the first half of the year, but also in the second quarter. In the second half of the year, it will get even harder to maintain our constant improvement. Our expectation behind our guidance is still that we have to prepare for negative effects due to the war in Middle East until December 2026. Our countermeasure, such as the previously mentioned process price increase, are already in place, so we have a good chance to make that happen. Needless to say that our strategy to strengthen our production capabilities and capacities in the previous years to become more resilient against those macroeconomic crisis is a clear advantage today. Let us put it like that. Regarding free cash flow, we are at -EUR 7.3 million after six months, which is EUR 3.5 million less than previous year. On this chart here, you can see the different drivers of that development. The net result for the period is obviously negative. This depreciation is around half a million higher than in previous years because of our investments in production and logistics. The trade receivables are up by 3.3 because of the dynamic of revenue during the second quarter, meaning that like in the first quarter, we had a higher sales volume towards the end of the second quarter. Our investments are temporarily up by inventories, I am sorry. Inventories are up temporarily by 4.3%. That also has to do with the seasonality of our business and with safety stock of raw materials because of our expectations for the second half of the year, which I mentioned earlier. Both trade receivables and inventories will eventually come down in the upcoming months. Our goal is still to decrease our working capital until the end of the year. Our investments are with EUR 2.3 million, EUR 1.5 below previous year. Due to the current business development, everything that we planned will of course, be carefully checked now and then if we have to cut or shift investments towards next year, we are in the middle of that process. It is worth mentioning that within the second quarter, our free cash flow is EUR 4 million positive. With the one-off effect of our FOCUS program, we expect our free cash flow to be break even at the end of 2026. We are fully aware that the month ahead will remain challenging, but nevertheless, our commitment to creating sustainable shareholder value remains unchanged. We have no plans to alter our dividend policy and continue to believe that shareholders should benefit from the company's strong liquidity position. At the beginning of June, our shareholders at the annual general meeting approved our proposal to distribute a dividend of EUR 1.2 or EUR 1.20 per share and to implement the proposed capital measure. This provides us with additional financial flexibility to support future activities. With that, thanks for your attention. I give it back to Alex. Thank you very much, Michael. Let's come to the strategy update. The strategy as you know by now, while the market conditions remain challenging, our strategy remains the same. Question obviously is, what is the next phase? Here I would like to give you an overview first and then more details. These are the three elements which are now very important for us in this phase of the strategy deployment. First of all, our Leifheit brand relaunch. We were talking about this in the previous call. It is about sharper positioning, it is about making sure we address the right consumer needs with the right product innovations. We have targeted marketing activities, especially at the point of sale. This is now coming to life at the point of sale while we speak. We have a phase-in which will start now as of July, August, and go until end of the year because it is a phase-in. We have then the FOCUS performance program I was speaking about briefly at the beginning already, and I will give you more details. It is about making Leifheit more competitive and future-proof as an organization. Then we have, regarding FOCUS company news, I think most of you will be aware that we always have said we want to review our non-core, non-FOCUS subsidiaries and businesses. We are now engaged an M&A advisor where we have a process of a potential divestment. The outcome of that obviously remains open, but we wanted to communicate this as an important element. That is FOCUS company. Overall, these three elements are the phase of what we are dealing now with, how do we want to deploy the strategy and how do we build and strengthen efficiency and resilience and obviously future growth of the company. Let me start with the FOCUS performance program, and it is important to say that we have seen the efficiencies as one example in the gross margin. But it is important that this is not the first time we look into how do we make the organization more efficient. But now really specifically, it is a very important program to focus on the organization, on the structure, on how do we make the structure more efficient, more customer-focused, and therefore also more focused on profitable growth. To give you more details here, the goal is really as part of our overall strategy to increase customer focus and agility, to be faster as a company, leaner and more fast in terms of response to new customer needs. We want obviously to really create a better platform for profitable growth in the future. What is happening in the program, we have a new operating model, a new governance, which has orientated itself along the key processes of the company. So especially lead to order to cash, so really process organization and therefore really helps us to not only simplify these processes, but also digitalize these much better. As you remember, we launched last year Brownfield S/4HANA, which is now a great platform to work on that. Overall, of course, with the savings comes also leaner structures and therefore faster decisions, a flatter hierarchy, and more ownership of the teams. Obviously, up to 70 positions and FTEs we have to reduce. We want to do this, of course, in a socially responsible manner, and we have been doing so also last year with the production shift from Germany to Czech. So we want to do that in a similar manner, obviously, with our workforce also in this project. Financial impact. As of 2028, we will have the full impact, which is a reoccurring annual savings of EUR 7.5 million. First benefits are expected, of course, in 2027. The overall implementation cost is EUR 9.6 million, which has an EBIT impact in this year and therefore the adjustment of the outlook for the year. Total impact this year, EUR 5.1 or EUR 5.4 million. This to the FOCUS project, in terms of headcount reduction, we have been, of course, working on that also beforehand already, but now the project comes and will bring the additional efficiencies. But overall, you see that also, especially in our production area, we have been reducing already positions versus last year. Now, brand relaunch. I think something very exciting which now comes to market, really to drive stronger sell-out at point of sale. You have here some examples. We started actually beginning of the year with a new packaging and also better products in the ironing area. Overall, what we try to do is stronger benefits. What makes us superior to private label potentially, but also to competitors. We want to have a more impactful brand. Presentation at point of sale, you see this maybe it's the beginning on that picture in the middle. And therefore also create, of course, stronger at point of sale presence where usually we as a brand in a lot of markets are very strong in terms of space. We want to leverage that better, highlight that better, make it more obvious and also with a clearer call to action for shoppers. It's the visual impact. At the same time, really the what is the product benefit, what is the point of difference. This, as I said, will now start. Next to that we have innovations, and we continue to drive our innovation. SUPERDUSTER, we spoke about that a lot. I think it's first of all a very important category for us. We have not been present or nearly not present. We have now started last year. You see the growth rate, of course, that is still on a relatively low level, but overall it is the biggest category we are in. It is bigger than floor cleaning. So a very big category and we have a very strong point of difference. It's washable, it's reusable, it is sustainable, much better than the leader in the market, Swiffer. And we have been pushing that a lot. We continue to do that. As one highlight, we now got distribution expansion in Kaufland. We were speaking about Kaufland before. We are now in Germany in 800 stores because performance of the product was good and we continue to develop that. It is not a sprint, it is definitely a marathon, I think. This is also part of that. But we have a great product and are very convinced that we will develop that continuously, very positively. Same with the BLACK LINE. We have been launching that, I think three and a half years ago, and since then continuously developed the line. It's now around about EUR 12 million and growing. You see MAG 19%. We want to keep that momentum. We want to continue that momentum into the future and therefore we came with new products already beginning of the year, but now we come with important cleaning, CLEAN TWIST in black. So we believe because this is a very big segment as well for us, this brings really new use to the category and is also attractive for retailers because we get additional space, additional promotions. We will come actually with an additional variant of that beginning of next year. You see that the pipeline is continuously coming and continuously expanding and more important is also to continue to develop these innovations like SUPERDUSTER. Not to do it one year, but really continuously to develop that. Then very important, and I think we are internally very proud of that, we come with Pegasus RockSolid. I think the name is the benefit in the program. I think it's the best standing dryer we have ever done as a company. It's really reflecting our brand as quality leader and really giving here maximum stability, mark-free so you don't have the marks on shirts because they have the thicker version. A 10 years quality speaks also for itself. It comes in two variations, and it will be dedicated especially to DIY and to our seller e-commerce D2C business. Also in terms of channel differentiation, we play this out in a very good way. That's from the brand relaunch, from the innovations and prior to that FOCUS program. This is what we drive in terms of strategy. As an overall summary, as an outlook, of course, I think we remain in a very extremely challenging environment, I would say. But we continue to deploy our strategy and develop our strategic initiatives. I think that's the important aspect. I think I don't have to speak more about the economic environment. We saw that also in our markets. But we want to really actively drive growth continuously and to be growing in these segments, obviously, as I showed you. So we will further develop our innovation pipeline. We have a long-term innovation pipeline where more and more innovations are going to come. Now, the new brand identity being more specific, why we are better, why we are the best in the categories we are focusing on gives us also a lot of reassurance. Then on the other hand, we also work on efficiency and resilience and therefore very important the FOCUS program, of course, with the savings it will deliver. But even more important, I think setting the company up in a better quality, being faster, leaner, and more customer focused will also develop future profitable growth. This brings us to the outlook, and you know the outlook. You have seen it before. Of course, you could challenge, wow, that looks challenging. We still believe that we can deliver that. We are, of course, now the forecast for this year, I spoke about that already. We think we have potential still to make this a growing company. On the one hand through the initiatives, on the other hand, obviously a bit of an environment which helps us is obviously also welcome. But then we think growth between 3% and 6% is feasible. If you have seen, we moved that out by one year, so it's 2028, because obviously we see that we first have to do the further implementation of the strategy to deliver that. And also on EBIT margin, we believe that we can deliver at a 7%-10% in the mid and then even in the longer term. This brings us to the outlook. Here in the detail for the group turnover, slight decrease of turnover, which means for the year to go on previous year level. This you see in the households same way. Wellbeing will improve in the year to go and therefore we expect mid-single digit decrease. Private label, especially V, will continue with a very good performance and therefore high single-digit growth. In terms of EBIT and cash flow, we expect break even, so we expect to be at a zero for both KPIs. Here as a summary, why we believe Leifheit is a good investment. We have a strong brand in attractive core categories and we want to become leaders in more markets in more of these two categories. We believe we have the potential to expand based on our growth drivers I have been highlighting today, especially innovation and e-commerce. At the same time, we want to be more efficient as an organization, but of course also here in production and logistics. Overall, Michael spoke about capital allocation, which we remain very focused on and very committed to. That's the presentation for today. Thank you very much for your attention and we come to the Q&A now. Thank you very much. Thank you, gentlemen, for guiding us through the slides. Let's jump now into the Q&A session. Please raise your hands for asking your questions and then please unmute yourself. You can also send us your questions using the Q&A chats of your dashboard. Please go ahead. Your questions, please. We start with Klaus Breitenbach. Please go ahead. Hello. Hello, it's Klaus Breitenbach. Can you hear me? Yes. Yes, absolutely. Hello, we can hear you. Okay. Yes. Thank you for your presentation. I have a couple of questions. The first one is on your gross margin, which increased to 46.2% despite declining revenues. How sustainable is this improvement? I hope you understand that it's not easy to do that, what we achieved, because when you think about utilization of the production and so on, we have various negative effects within the gross margin, but there are no one-offs or something like that. Therefore it's sustainable. It will be impacted by higher raw material costs and container costs we expect in the second half, but we work against that with the price increase. Therefore, it's a sustainable development. Okay. Thank you. The next question is, which demand trends did you see in July and early August? Sorry, Mr. Breitenbach, which? What was the The demand trends. The demand, the trends Yeah did you see in July and the early August for your products? Yeah. Which demand coming from consumers, from the market? Yeah. August is very early day. I think August overall looks good. I think July was on the development we have received before. So very in line with that. But we are quite positive now with August. Yeah, but still early beginning. But again, overall, I think on the year to go development, we are cautious. I think we have been obviously ourselves disappointed by the top line development. That I think must be clear. But we are more positive now for the second half. We are running against the weaker 2025 and on the key customers, which has the key impacts, we see a much better negotiation on activation. So this may be January, but to your question, July more in line with year to date and August positive but still early. Okay. Thank you. Yeah. Thank you, Mr. Breitenbach. Thanks for the questions. Mr. Kaiser, you are raising your hand. Please go ahead. Hello, everyone. Thanks for the presentation and thanks for taking my questions. A couple of questions from my side. I start with the first one. You already mentioned it during your presentation, the external M&A advisor and the M&A process you are currently in. Could you shed a bit more light on that? Maybe the assumed timeline or anything else? Should I? Do you want to say? No. Michael, please go ahead. Yes. We're in a very early stage regarding that project, but it has to do, of course, with strengthen our strengths, basically our FOCUS strategy, focus on our core categories and what's not in the core will be checked. But we are in very early stage currently. Unfortunately, there's nothing that we can add to that at this point in time. It is like that. Perfect. Thanks a lot for that clarification. Then maybe on your overall group sales, and I already elaborated a bit during the presentation with regards to the household segment, and when Q2, roughly down, you're near double digits. Could you elaborate a bit more? I mean, you already mentioned discounter channels as hard and Kaufland was also challenging, a bit more what's going on in this quarter and what we could expect for H2. Also, what makes you positive and convincing of this segment for the second half? Especially on households, you are saying, right? Did I understand- Yes. Okay. Yeah. Thanks for the question. Let me try to elaborate a little bit. I think, year to date, minus 6.8% for households, is driven by the overall key segments. In terms of customers, let me try to rephrase that. Discounter, Kaufland and Amazon Vendor are the big impacts. Amazon Vendor, we more than compensate by D2C. But the other three customers, as I try to explain, are either having a different strategy for this year reflecting the consumer environment and this hits the category overall. They're going more on private label. Kaufland overall, Kaufland is highly dependent on promotions as a customer overall. They sell a higher percentage of their sales overall on promotions. They were entering the year, but in the top to top meeting, this was the discussion overall as a company with a lot of stock level across a lot of non-food categories. So also, that was an impact for us. That was impacting half one. Now, we get the first additional promotions, which is a sign that their stock levels are on a more healthy base, and it's a big customer for us, so therefore, that plays a role, that's why I'm mentioning it. That makes us more positive for the half two and also the discounters, as I tried to explain, we have some activities already locked in, which gives us at least the certainty that we will not see such a drop in sales overall and impact overall as in half one, which then makes us more positive or makes us positive for the outlook of the year and therefore the previous year level for half two. Yeah. Perfect. Thanks a lot for the clarification. Maybe my next one on the free cash flow down or negative EUR 7.3 million in the first half, implies roughly EUR 7.3 million positive swing in H2. Mr. Kohl already elaborated on the inventory, so the initial plan is still to decrease inventory, even the second half of the end by the year-end. Is that the major swing we can expect for the free cash flow the second half of the year to reach the guided breakeven level? First of all, the net result for the period will go up. We will have lower inventories at the end of the year. I think lower trade receivables and those effects are the major effects that will drive the cash flow positive then in the second half. Perfect. Thanks a lot. Speaking about free cash flow, already implies also a question on the dividend. Your guidance for free cash flow is zero, EBIT is guided zero, your policy is 75% of free cash flow or net profit. Any particular plans on the dividend and maybe what visibility you need on the business as well as liquidity to still stick to your plan for 2026? I fully understood that you are not willing to change the overall dividend strategy, but particularly speaking of the current challenging year. I think we have financial flexibility to think or to go in various or every direction, basically. But in a year like 2026, with the, like you said, the challenges ahead in the transition period that we are in with our FOCUS projects, which we are talking about, what that now means for the dividend for the year, I think it's too early to speak about that. But yeah, I think it's too early. But in general, that's why I mentioned it in my presentation. In general, we are committed to our policy and we will not change that. Perfect. Thanks a lot. Very helpful all from my side. Thank you very much. Thank you, Mr. Kaiser. Mr. Breitenbach, you are still raising your hand. Any follow-up questions from your side? That seems to be not the case. Once again, any further questions from the audience? Please raise your hand or use the Q&A chat of your dashboard to send us your questions. Any further questions, then please raise your hand. There do not seem to be any further questions for today. Mr. Kohl, Mr. Reindler, your closing words, please. Yeah. Thank you very much again for your participation in the Q&A. As we have been presenting, I think market conditions remain challenging. What is important is that first our strategy remains unchanged, and secondly, while the environment is challenging, we continuously work on and implement our strategic initiatives. We continue to invest in our brands, develop innovations and our growth initiatives. At the same time now, with the launch of the FOCUS project, we are building a simpler, faster, and more consumer or customer-centric organization and make Leifheit long-term, more profitable. We remain at the same time very committed to creating sustainable shareholder value. Thank you very much for joining today, and hopefully see you soon on one of the conferences or in the next call. Thank you very much. Thank you, gentlemen. We will now close this conference call. Goodbye