Earnings Call: Q4 2025

Mar 31, 2026

Summary

FY25 revenue fell 10.3% amid weak markets and portfolio effects, while gross margin rose 1.2 percentage points and EBIT remained near prior-year levels before one-off costs. FY26 guidance calls for slight sales growth and broadly stable EBIT despite higher marketing and input costs.

Ladies and gentlemen, thank you very much for joining us for Leifheit's conference call on the business development in financial year 2025. First, the management team will present you with financial figures and ongoing strategic initiatives. Afterwards, you will have the opportunity to ask questions directly. Please note that the conference call will be recorded. I will now hand over to CEO Alex Reindl and CFO Marco Keul for the presentation. Mr. Reindl, please go ahead. Thank you very much. Thank you very much, and a big welcome, ladies and gentlemen. Welcome to our investor call for the full year results, 2025. As usual, I will start, then Marco Keul will give you a more detailed update about the financials, and then we give a strategy outlook and obviously the outlook for 2026. If we look at where we stand, 2025 was a challenging environment, yet we have some very good progress on our strategic initiatives and on the strategic transformation of the company. We first see a group turnover, which was down in 2025. Yet on EBIT, we were very close before special effects on the previous year level. We have a very attractive capital allocation with a strong dividend proposal for the annual meeting, and we have been implementing key strategic projects, especially in terms of efficiency in 2025. Now, 2026, the next phase of our strategy execution starts, which means we have two pillars. One is the investment into the brand relaunch in our innovations and campaigns. On the other hand, we continue strengthening our efficiency and resilience with a focused company, which I'm diving more into later. If we see the consumer environment, obviously, it remains challenging. We see quite weak data recently on consumer confidence. The latest data shows a strong decline in Einkommenserwartung. We also saw the tendency to buy at the lowest level since 2008, actually. So a relative negative environment we are in. If we now have a look, first of all, at top line, let me go, as usual, into more detail here. Top-line development for the group overall, minus 10.3%, driven by the negative market overall, I will come back to the market development, and also by the portfolio adjustments we see in the different segments. Household, slightly better, minus 9.6%. There, the core business, especially mechanical cleaning and drying, was around about minus 6%, so in line with the market development. The market we are auditing, we get data from both around about minus 6% as well. So driven, therefore, the negative parts with electric cleaning and also the non-core business. In wellbeing, so the brand Soehnle, we see a stronger decline of minus 14.6%. It was driven, and we were reporting about that in the other calls, by two customers, especially by Blokker, which went into bankruptcy. That was an important customer for or there was a big initiative for Soehnle as well as the Blokker impact. The Action, sorry. Excuse me. The Action impact. Private label we see at minus 12.7%. This is twofold. On the one hand, Herby, our dryers. Herby was stronger in the negative because there, the Blokker effect was very critical because this was challenging for a private label producer to compensate. On the other hand, Birambeau showed much more resilience with being in the mid-single digit decline. If we have a look at the different geographies, first of all, the decline goes throughout the different regions. Germany, we see slightly better with minus 7.8%, especially better via the DIY development, which shows stronger resilience and also the D2C business, the e-commerce business. On the other hand, Central Europe and Eastern Europe, as usual, a mixed bag of markets. We see in Central Europe slightly better. The Netherlands, Austria as two strong markets we are in, and a weaker development in France and Denmark. The rest of Eastern Europe, we see especially here weaker development in the e-commerce business in Czech and Slovakia. On the other hand, better business in one of our core markets, which is Poland. On the rest of the world, which is mainly the business outside Europe, of course, there is especially basically the impact from the U.S. business where we have one customer and which due to stock level has not ordered in 2025 and therefore resulted into that decline. Anyhow, the business is relatively small. If we have a look at the different quarters in their development, you see that and you remember that the impact for the different quarters in 2025 was different. We had especially impact in quarter 2, quarter 3, a better quarter 1, and also quarter 4 closed slightly better. So definitely a positive tendency in the quarter development, at the end of the year, which was driven by better e-commerce, but especially also by the stronger contribution of our innovation, especially in the SUPERDUSTER, but also the BLACK DIAMOND campaign we had for Black Friday. Structurally, our core categories remain very attractive, and you have seen that before long term. The core categories, mechanical cleaning and drying, have a strong flavor of 4% year-on-year development. Last year, definitely disappointing, of course. The core, as I said before, was minus 6%, and this is in line with the market. Actually on the market development, in Europe, we audited the mechanical cleaning, which is in that range. We have seen a better quarter 4 for us, so with strong market share gains. Overall, in the year 2025, we have stable market shares. We don't have structurally losses there. It is driven by the market decline. To highlight two of our innovations, first of all, the SUPERDUSTER, we believe that strategically a very important segment. If we look at mechanical cleaning, the different segments within that, the dust is one, is next to floor cleaning, the biggest. If we look at the last 10 years, the entire market growth was only coming from dust. Therefore, for us, very important to get a strong foothold in that market segment. We have, with SUPERDUSTER, a strong point of difference, a sustainable solution, and we executed that very well last year with strong visibility at point of sale and participating really by the strong growth we have seen. We achieved, slightly over-achieved our budget for the launch. Now in 2026, we are very confident to drive this further with important consumer communication, which is essentially starting quarter one this year. SUPERDUSTER are very important and we also, on the innovation roadmap, we work on further line extensions to continuously support that segment. Then, of course, I think a real success story remains the BLACK DIAMOND line. We have been adding new products to that line in quarter four 2025, and overall it resulted in a strong growth of 24%. It is now far beyond EUR 10 million, so a significant market segment for us and a very good development. I'm coming back to that, as we also are in that range also in 2026. This is for growth. If we look at efficiency, it was very important for us strategically while the business on the top line was challenging to really keep on working on the strategic pillars, especially if it comes to efficiency improvements. There we had first the consolidation of the injection molding at our site in Czech. So the transfer from the injection molding still being here in Germany, transferred to Czech, which will give us efficiency gains going forward. On the other hand, the implementation of S/4HANA, the new SAP system, which will also give us, and we work on that through that continuously on further improvements, will also give us further efficiency gains. This being said, I now hand over for more details on the financials to Marco Keul. Yeah, thanks, Alex. As always, I will go through our financials for 2025 and say a few words regarding capital allocation and our recent communication. After that, we will give you an update on our strategy and talk about our outlook for 2026. Despite the decline in turnover, we made good progress in terms of profitability in 2025. Firstly, we increased the gross margin another 1.2 percentage points without the additional costs of shifting the injection molding from Germany to Czech, of EUR 1.6 million of costs, and we were able to save costs below the gross margin of roughly 10%, mainly in admin and distribution costs. Please keep in mind that the cost for the strategic project with the project which Alex mentioned, such as S/4 conversion, brand relaunch, et cetera, are included in that. That led to an EBIT only slightly below previous year's level without the one-off costs. Of course, an EBIT margin of around 5%, which has not been embedded for 2025. Taking into account that we also had no help from our foreign currency results, which has been zero after EUR 0.5 million in 2025. Let's take a look closely at our margin development. Seven percentage points in the last four years and 1.2 better in 2025 than in 2024. One of our strategic goals, as you know, is to strengthen our manufacturing footprint in Europe, which should lead to continuous margin improvement and due to FOCUS on efficiency and flexibility and therefore lower costs and higher resilience, which will be especially important in 2026. More on that later. Another important aspect, of course, is the FOCUS on profitable products within our campaigns. For the second half of 2025, we saw the additional savings of our relocation of the injection molding for the first time. Our free cash flow is still down versus previous year, but massively improved within the second half of the year with plus EUR 10.5 million. I will speak about the details on the next slide. However, on this slide, from my point of view, it's important to notice that we had a cash out of EUR 15 million because we paid good dividends of EUR 11 million and had a cash out of EUR 3.5 million because of the second part of our share buyback program, which ran out in April. Let's have a detailed look on the free cash flow development. On the left, we start with our cash flow at the end of 2024. Our net result for the period reached EUR 6.2 million, which is non-adjusted, of course, and therefore EUR 1.8 million below previous year. Depreciation and amortization are EUR 0.4 million higher than last year because of the higher investment into our own production and logistics over the last two years. Speaking of which, you see on this chart the EUR 9.6 million we invested this year. Let me recall, based on my rough calculation, we will require approximately EUR 10 million per year until 2027. When it comes to working capital, we were able to reduce it again by roughly EUR 2 million, and we still think there's room for improvement. It depends on the growth we are planning and on measures we have to take in order to work against the higher input costs due to the war in Middle East. To put that into perspective, since 2021, we've used our working capital, which means the trade receivables plus inventories minus the liabilities from EUR 73.5 million to EUR 42.4 million, representing a reduction of EUR 31.1 million in the last four years. On the right side, with the EUR 11 million dividends and the EUR 3.5 million share balance buyback, this brings us to the cash of EUR 32.6 million at the end of 2025. Of course, our commitment to shareholder value remains unchanged. We will stick to our attractive dividend policy, and I think you have seen our proposal to the general assembly to keep those dividends stable. Share buyback programs are still something we are generally considering, but everything we do has to be balanced against the necessary investment in our capabilities, especially when it comes to innovations such as the SUPERDUSTER or optimization projects for the manufacturing, for example. In addition, we proposed a capital reallocation to this year's annual general meeting. In line with our commitment to shareholder value, we decided to convert the capital surplus, which underlies specific restrictions so that it could be used for distribution to shareholders. On this slide, again, our proposal for this year's dividend, which would correspond to a fairly high dividend yield of 7.9% after 7.6% in 2024. With that, thanks for attention. I give the work back to Alex Reindl, who will give you an update on our strategy. Yeah. Thank you very much, Marco. Exactly. This is what I am going to do. So strategy update as well as an outlook, because you will be very interested to hear more about 2026. First of all, the FOCUS is execution of the strategy. The strategy remains, I think, especially in the environment we are, a perfect fit. It is focused on what is our strength, where we are best at. We want to be specialist leader in mechanical cleaning and drying. It is a FOCUS on consumers, where we make a difference, ideas that make life easier. That is the FOCUS. We want to invest into our brands to really drive growth. These are the two elements which I was mentioning at the beginning. So the phase in 2026 is the next phase of our strategy execution, and these are the two important pillars. One is really investment into growth. We have and we want to come back to growth in 2026. Therefore, we have a lot of initiatives, especially around the Leifheit brand relaunch. On the other hand, we also want to continuously drive and drive even stronger our efficiency with optimizing our processes and reducing our structural costs, and therefore increase margins. Let me tell you first about growth. This is what you have been seeing before. Our four growth drivers is, and let me talk about especially brand positioning today and innovation. Beside that is to see how we grow outside Germany and how we scale our e-commerce digital model there. I can give you an update in the next call. Brand relaunch. It was from the beginning when we crafted the strategy obvious that we have an opportunity with really refreshing, rejuvenating, and modernizing the brands. This is what we are now doing. So the brand relaunch will take place as we speak during the course of 2026. It is a sharper brand positioning, really focusing on the promise, ideas that make life easier. We will see that on point of differences in the specific products and in communication. We have expanded marketing campaigns, so we will need more investments into our campaigns to drive growth. This we will be doing in a very targeted manner, very focused where we can win, and we will continue to launch product innovations which are significant to the consumer and also to our growth ambition. As a target, we want to generate a new growth momentum. After last year, we need growth and we want to achieve growth by these key measures. Let me talk you through a couple of important elements. First of all, it is the investment into the brand, into the biggest asset we have, and we do this via targeted marketing campaigns in the best sellers to drive growth. We do this across different channels, from TV to streaming, to obviously digital, also to drive our e-commerce share. We do this with these four campaigns you see there. One is in mechanical floor cleaning, is our CLEAN TWIST campaign. Then you see the SUPERDUSTER campaign. For the first time actually, we now communicated to consumers in media, and then importantly, Pegasus, the standing dryer, as well as the Linomatic, the rotary dryer. These are the four campaigns. We focus very strongly on three key markets with strong investment, which is Germany, Netherlands, and Poland. At the same time, we have product changes which are now coming up and which are also visualizing the new brand image, being younger, being fresher, being more modern. We started already, you see this already at some point of sales, with a relaunch of our ironing boards. We come with more modern covers and at the same time on the right side you see that with a better point of sale execution, which drives navigation on shelf. These products are placed usually as you see there on screen, so they are easier to navigate, they are easier to find with the respective point of difference and consumer benefits. New packaging and new presence at point of sale will drive navigation and sell out. Here, another example, a small change actually, but which makes a big difference for consumers because we know that consumers also wish to hang small items at the large Linomatic. We have an improved version, actually the best Linomatic we have ever done, the Linomatic Deluxe K6, which we introduced now beginning of February. We have more innovations to come. As usual, I cannot tell you much more today, but we will come back to that obviously in our next call that will be launched in the second half. On the one hand, we will have an important extension of our BLACK DIAMOND line. This will be in the area of floor cleaning. On the other hand, we will have an innovation in laundry care that I can promise you already is the best product in laundry care we have ever done. By far the best, and I think that is great news for a very important and big segment where we are market leader and where we want to further strengthen our market leadership in Europe. These are the innovations which are going to come. Now on the efficiency side, you will be interested to learn more about our FOCUS program. First, I think it is very important that from the start of the new strategy, we will continuously focusing on efficiency to generate profitable growth. I spoke a lot about growth here. It is about efficiency. We have set up a new organization, mostly in marketing and sales. We have a very strong focus on lean manufacturing, especially for the D2C business, also in logistics, where we established a central European logistic hub in France. I spoke about the consolidation of the injection molding last year and the implementation of S/4HANA. Now in 2026, we started already. We are in the progress of the performance program FOCUS. Let me give you a little bit more details to that. What is the target of that program? First, the overall target is obviously to structurally reduce costs but also strengthen the resilience of the company, especially in the environment we are navigating. This means that we look at our structures and end-to-end processes. We want to simplify them. We want to make them more agile and therefore reduce costs and increase margin. We want therefore afterwards align the organization towards that, towards profitable growth. As I said before, we want to strengthen especially resilience and also competitiveness when it comes to having a more agile and a faster organization and structure. We need to be faster than competition, and therefore it is very important for us to look at the different elements of processes of organization and of resilience. That, I think, a very exciting and very important project. We will finish the project around about mid of the year, mid-2026, and we can then give you obviously more information about the results. Now coming to the outlook of 2026. As I said, it's important for us to return to growth, and as a result, we will keep earnings stable due to the investment. It is a very complex environment, obviously, we are navigating, but it is a very clear strategic response from our side. We see a very challenging economic environment, obviously now for about four weeks. We see the conflict in the Middle East, which gives additional uncertainty and drives energy and commodity prices up strongly. On the other hand, we also see in the environment that, as I said, the consumer sentiment remains low. That was always our hypothesis for the year. But of course, now the conflict in the Middle East is definitely not helping to better the sentiment there. Challenging economic environment. On the other hand, again, we want to drive growth. We want to actively drive demand and sell out, and therefore we have the clear focus on our best sellers within the core categories, which work where we have proven communication. We will, on the other hand, also continue our innovation program and target new segments or to improve existing products, make them more attractive for consumers and shoppers. Therefore we need increased marketing investment to support this brand relaunch and the innovations to drive demand and to drive growth. On the investments, obviously, they have an impact on our earnings. The higher investment in marketing will be particular in the first half of 2026 and will temporarily impact our EBIT. Therefore earnings are on previous year levels. Last but not least, I spoke about the FOCUS project, very important that at the same time, while we come back to growth, we also intensively work on our efficiencies, on our structural costs, and on our resilience. Therefore the efficiency improvement in next to production digitalization to look into the processes, especially as part of the performance program, FOCUS. That's the package. That's the strong response to the environment and to be more competitive. This brings us to the outlook of 2026. You have seen that on group turnover, we expect slight growth versus 2025, versus previous year. We expect that in the household segment. We have slightly a different outlook for wellbeing that will be in the mid-single digit decrease. On the other hand, for private label, we estimate a high single-digit growth. EBIT will be roughly on previous year level, and cash flow will also be roughly on previous year level. That is the outlook. What still is in place is our midterm outlook. It remains in place, and it remains absolutely valid for us. Topline was not in line with expectations in 2025, but still, we are sure that we can achieve the ambition in the mid and in the long term and develop this company to a growth in the mid-single digits and to a much better margin as outlined in the midterm vision. Okay. As a summary, in a nutshell, we believe that Leifheit remains very attractive in terms of profitable growth and as Marco Keul outlined, in terms of attractive shareholder return, with a strong vision and FOCUS, a strategy which we are executing now continuously. We have potential to expand via our different growth drivers based on the brand relaunch, based on growth outside Germany with innovations and with e-commerce. At the same time, we have a lot of efficiencies when it comes to production logistics, but also in terms of structures and organization and a very attractive capital allocation. You have seen that with the proposed dividend to the annual meeting 2026. Perfect. That is it from our side. Thank you very much for your attention, and now we are very happy to take your questions or comments. Yes. Thank you, gentlemen, for guiding us through the slides. Let us jump now into the Q&A session. Please raise your hands and unmute yourself for asking your questions. If you are dialed in by phone, please select star number nine to raise your hand, and please select star number six to unmute. You are now welcome to ask your questions. Please go ahead. We start with Mr. Breitenbach. Please go ahead. Please unmute yourself. Hello, can you hear me now? Yes. Perfect. Yes. I have one question regarding the development in regions in 2026. Do you expect a similar performance as we saw in 2025, or do you see any growth in any regions? Thank you. Yes. Thank you, Mr. Wagner. I just want to make sure I got your question. So you are asking about the different regions and our growth expectations in the same region? Yes. Okay. Yeah, right. We don't give an outlook per region, but as I said, we have strong investments in our home market, Germany. This is definitely where we expect growth. Otherwise, as I mentioned, in Netherlands, Poland as examples, so Western, Eastern Europe, I think overall also we want to come back to growth now. So we expect for these three regions, slight growth, I would say. We have different focuses on different countries. They are in Eastern, Western Europe and obviously Germany as a home market remains very important here. Okay. Thank you. Thank you for the question. So any further questions, then please raise your hands. We continue with Mr. Kaiser. Please go ahead. Now. Can you hear me? Yes. Yes. Perfect. Thanks. Thank you. Thanks a lot for the presentation and for taking my question. I would start with the top-line development. Could you shed some more details on the kind of split, what was non-recurring negative impact. You mentioned the involvement in the Netherlands, for example, and some portfolio changes. What was the volume price effect on the decline of the top line. Any insight would be helpful. Yes. Thank you very much, Mr. Kaiser. Thanks for the question. I think a key is for our core business, that we have no structural effects, but it was driven by the market. As I told you, if you take the market data we have, the market was declined, depending a bit on the market, around about 5% to 6%. Our core business in net sales, pretty much the same. Also in market share, we did not see that we lose market shares. We had a very good quarter 4, for example, in market shares. Therefore, the decline comes from the non-FOCUS and non-core businesses. We had still some decline on electric floor cleaning, which we are phasing out. Then we had some other promotional effects also in the segment I was mentioning. Blokker as a customer had an effect. Excuse me. Blokker, excuse me. We had an effect with Blokker, which was especially in the private label business, an effect which is more structural, I would say. In price effect, we do generally, broadly, slight price increases, price adjustments. We have done that also in 2025, of course, at a very low level. This might change this year. Therefore we had some price effects. But overall, we saw mostly a volume decline. This was also visible in the market. The markets were declining mostly in volume. We had some more promotional activity, but this was not to the extent you might expect. Perfect. Thanks a lot. Very helpful. You have indicated that the cost saving from the FOCUS program will be used to finance increased marketing activities, particularly in the first half of the current fiscal year. Can you quantify the incremental marketing spend you plan for this year. Maybe also compare to last year to get an idea of the potential magnitude of those spendings, if it is possible. Marco, do you want to take that question? If I understood correctly, I had some delays, I think. You are referring to or you are asking about the increase in marketing spendings in 2026. Is that correct? Yeah, more or less. Or the overall sum you earmarked for marketing, if you get an idea of the magnitude, and maybe that is in contrast to what you invested in marketing in 2025. Okay. What I can say about that is, you will see in the first quarter, especially in the first half of the year, that we are seeing an increase in our marketing spendings, let us say mid-single or a low to mid-single digit million EUR. There will be no effects of the FOCUS project in the first quarter or first half of the year in that increased marketing spending to finance that. But overall, if you look at the second half of the year and the years following, might be, but not in 2026. Perfect. Thanks a lot. Very helpful. My last one is with regards to your guidance and the Middle East escalation. You guide for slight growth and top line and flat EBIT. Mainly because of the increased marketing spending. Is there anything potentially negative also already included in your added guidance, rising prices, raw material prices from the current conflict? Yes, of course it is. We are expecting that in our current forecast, in our guidance, we are expecting that we will see effects on our input costs in the whole year 2026. Therefore, actually the biggest effect that the additional input costs we are expecting and which we used to calculate our guidance is bigger effect than the additional marketing spendings. But of course, we are working with different scenarios. Like I said, the scenario which we use is that we will see higher input costs or effects on the input costs until year-end, and of course, countermeasure to reduce those additional costs. Overall then it brings us to our guidance that we currently think that we should be able to achieve within that environment the previous year's level on EBIT here. Ah, okay. Very helpful. Thanks for the clarification. All from my side. You are welcome. Mr. Breitenbach, you are still raising your hand. Any follow-up questions from your side? No, sorry. There are no follow-up questions. Thank you. Any further questions, then please let us know and raise your hand. Once again, any further questions from the audience, then take the chance and raise your hand. Gentlemen, there do not seem to be any further questions for today. Your closing words, please, Mr. Colmar-Daiger. Yes. Thank you very much, ladies and gentlemen. Thank you very much for participating in our call today. Let me summarize 2025. Definitely a challenging environment with a weak market growth as a result. On the other hand, we structurally improved efficiencies in our cost base, and we further developed the strategic transformation of the company. For 2026, we now have growth plans via brand investments, via innovations, via our core categories, and we have planned to even stronger continue our work on efficiencies. The efficiency program will improve margins midterm. On the other hand, as you know, we have a strong balance sheet and we have a very attractive dividend, which remains the key part of our equity story. That is it from our side for today. Thank you very much again for participating and see you very soon on one of the conferences or in our next call. Thank you. We will now close the conference call. Goodbye to everyone.