Earnings Call: Q4 2024

Apr 9, 2025

Summary

FY24 revenue edged up 0.4%, while EBIT doubled to €12.1 million and free cash flow rose to €14.2 million. FY25 guidance targets 2%–4% growth and €15 million–€17 million EBIT, with longer-term growth driven by core products, innovation and e-commerce.

For joining us for Leifheit's conference call on the business development in fiscal year 2024. First, the management team will present you with final figures and outlook for the Leifheit Group. 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 Alexander Reindler and CFO Marco Keul for the presentation. Mr. Reindler, please go ahead. Yes. Thank you very much, Mr. Rura. Ladies and gentlemen, a big welcome from our side to the investor call, investor presentation for full year results 2024, which we are going to share with you. In addition, as usual, we want to give you an update on the progress for the strategy, but today also a midterm outlook next to the guidance for 2025. If we have a look at the summary, we see overall a strong profitability increase for 2024. You have seen that already in the prior announcement. We see a progress on the strategy and its implementation. Growth overall turnover for the group, 0.4% for 2024. Strong improvement in gross margin, 2.5 percentage points, which basically is, I think, the main strong result, which then results into a doubled EBIT to EUR 12.1 million. A very strong development on free cash flow, which increases to EUR 14.2 million, up 2.1. For 2025, as I said already, we, of course, want to give you a guidance today. In this guidance, we foresee growth for group of approximately 2% to 4%, and we see Group EBIT in the range of EUR 15 million to EUR 17 million. As you have seen in prior announcements, the dividend proposal for 2024 is an ordinary dividend of EUR 1.15, and in addition, a special dividend of EUR 0.05. We have ongoing share buyback program in our also already communicated very shareholder-oriented dividend policy. This is a summary. Let me go to the details. First of all, obviously, in the environment, a lot is happening in the macro geopolitical environment for sure. What we see overall in consumer sentiment here for both for the European index and also for the German business, giving the importance of the German markets for us. In this data, we obviously see that consumer confidence remains on a low level. We see this both for the European data and as well in the German aspect. We see also a decline here from end of last year to the first quarter of 2025. We see in the business that's resulting into less traffic in stores and obviously consumer being apprehensive in buying. We see this partly also in pricing. We see also channel developments, channel shifts more to discounters and more to e-commerce as well. If we now look at the more detailed results overall for the different segments of the company and of the different geographies, we see the 0.4% development for the entire group. We see now the different segments. Household is developing positively, slightly positive, 0.7% growth, which comes from the core business, where we can say that drying is developing stronger, driven also by the Black Edition initiative. Cleaning is slightly degrowing, and this comes especially from the electric products, which we are partly phasing out. We see Soehnle here, which is the brand Soehnle essentially, a decline. Soehnle as such in the focus of scale is on the same, on the 2023 level. No decline, but the decline comes through the phasing out of the air purifiers, which we are phasing out because Soehnle strategy is clearly focused on scales. On the private label, you see also positive development, actually strong development, 3.3%, which especially comes from the kitchen. Birambeau is a company which had a very good year last year. Herby is slightly decreasing due to special customer impact, which we also have for the Leifheit business with a Dutch customer who went into bankruptcy. Now the different geographies. You see Germany, and we have been talking about the entire 2024. Germany is negative -5.6%, which comes especially due to two effects. One is the discounter effect at the beginning of the year, the first quarter 2024, which is more or less half of that effect, when we were actually reducing that impact throughout the year, which we see in the discounter numbers. The second effect is here the logistics or the ordering pattern of our largest e-commerce customer, which depends on where the ordering takes place. If we take these both effects out of the German number, Germany is actually slightly growing. Then we have a growing region, Central Europe, 2.4%, driven a lot by Belgium, France, Spain, where we see on the one hand, e-commerce, on the other hand, distribution expansion. We see on the other hand, Netherlands, Italy, a bit softer. Netherlands also due to the customer impact we have experienced in that country. Eastern Europe, very strong growth, 7.7%. We are very happy with the Eastern Europe development, which is driven here lots by Poland and Slovakia, very strongly, but also by the other two big markets, which is Czech and Romania. Overall, a very solid, very good performance in Eastern Europe. Then rest of the world, you know that is mainly our distributor business outside Europe, which is fairly small. Shows a high development given the strong development of our American customer, U.S. customer, and also the Far East. If we now look into the development of the different channels, we see that e-commerce grew by 4.3%. Over average, we see, especially in D2C, a strong development. I am coming back to the French case, which we have reported already. We can share with you some updated numbers, which is the pilot case for us to really have more digital investment and drive D2C in France, very successful. Next to e-commerce, the other channel, second channel is the DIY channel, which you can see also the participation. Our net sales grew from 16% to 18% and overall a very strong growth of 6%, which comes basically due to distribution expansion in Germany, but otherwise also by our focus on that core channel for us as a business. The discount channel, we have been talking frequently about that. You see, we keep the average part of the business, but we saw a decrease overall in discounter because of Q1. Then you see a decrease in the retail wholesale department stores where we have the effects from the Dutch customer, but also from German customers who are in that bracket. These are the channels. Now a little bit an update on the initiatives. You see a Black Edition in 2024 in the second year. Still, these are updated numbers, even into Q1 2025, you see here. Still very strongly growing. Very good. We are very happy with that development and we continue to penetrate these products across Europe, with very good results. It shows that even these type of innovations can be very relevant for our consumers and it makes us confident that with the innovation strategy, I am coming back to that later, is a big growth potential. This is the case in France. You see here, I have shown that last time if you have been on the call already. Otherwise, this is the pilot case for us with a relatively big e-commerce business. 22% of our business is e-commerce with our D2C capabilities which we have, with building new D2C logistic hub in Chablis in France. Then with additional distribution and with additional investment into performance marketing, we can reach quite significant growth. You see here the triple of growth in that area. This year we are quite confident that we can really build this to a significant business. Last year it was still on a small base, but as we speak, I think we will continue to grow that business. It makes us very confident here. Obviously in D2C, we see exactly what works and what doesn't. We adjust, we learn, and so far, we are very happy with the results. On the organization, it has also an impact on the bottom line, therefore, I wanted to bring that up again. What we have been doing is we have been restructuring, reorganizing, especially the sales and marketing setup. We have really established global function to have a better steering of the European markets in sales, in e-commerce, and also in shopper & customer marketing, where we are much more focused now on the execution on store, on shelf, and also the marketing organization we have reorganized. Really generating efficiencies also for 2025 and beyond. On the other hand, we have the new Central European logistic hub in place since end of 2023, where we have now really executing a strong focus on the D2C business and obviously with an optimized logistic cost because of the cheaper forwarders out of France. This was what I wanted to quickly, in referring to 2024 results, give you as a short update. I will give you later an update on the strategy progress, but now I hand over to Marco Keul. Yeah. Thanks, Alex. I suppose that you are already familiar with our results, but nevertheless, maybe I can give you some additional information. I will do that briefly so that we have enough time to speak about our outlook of 2025 and beyond, and, of course, to give you an update on what has happened since implementing our new corporate strategy. After that, we should have sufficient time for our Q&A. Regarding our revenue, we had some ups and downs in the course of 2025. We started with a weak first quarter due to big discount promotions in 2023, which we did not repeat in 2024. We had to face the insolvency of Galeria Karstadt Kaufhof, quite a big customer for us in Germany. In quarter two, we saw that extending our D2C business, especially in France, like Alex mentioned, with our logistics center that we implemented there, would be an important step towards growth in 2024. We were able to achieve additional distribution, especially in DIY, and therefore, on previous years' level, let's put it like that, after six months. On top of that, we saw that we were successful with extending our very successful Black Edition range. In the third quarter, we won additional promotions and discount again, which helped us, on top of the previous mentioned points, to grow by 6.3% in the third quarter. Quarter four has been, let's say, a bit disappointing, to be honest. We experienced a weak consumer sentiment in brick and mortar, as well as in e-commerce. On top of that, we had to deal with a few insolvencies, especially one of our former top 10 customers, Blokker, in the Netherlands. Despite those negative effects, we managed to end the year with a quarter four on previous years' level and with a slight growth of 0.4% in 2024 overall. In terms of profitability, we have been quite successful. We were working hard to get our gross margin back to the pre-crisis level of 2019 and therefore we achieved a nice improvement of 2.4 percentage points despite the negative effects from organizational changes, which Alex mentioned as well, of more than EUR 2 million, which are mainly linked to our new corporate strategy, of course. We managed to double our EBIT and to increase our EBIT margin to 4.7%. The net result for the period went up from EUR 3.2 to EUR 8 million. Because of that, and some help of our share buyback program, of course, we nearly tripled our earnings per share. As you can see on the right side, of course, there is still a way to go, but, we are strongly improving, in, I would say, challenging times currently. I talked already a bit about our margin development and how important that was and still is to increase our profitability. To stay on track, we have to focus on keeping our price levels up. Furthermore, increase productivity and efficiency in our facilities. That also includes our D2C capacities and focus on our most successful and profitable products, of course, with high effective campaigns online and offline and, where possible, implement selective price increases. Last but not least, one of our priorities is still to strengthen our manufacturing footprint in Europe. Today, we buy roughly, let's say, 30% of finished products and raw materials in China. All things combined will make us more resilient when it comes to unstable supply chains that we see currently, and increasing costs such as the Red Sea prices we saw early in 2024. On this chart, you see the price development of the most important raw materials for Leifheit and energy on the bottom left, which is especially important for our own production in the Czech Republic. I don't want to go into detail here, but keep in mind that the margin development we saw earlier was achieved with procurement prices, which are still 34% up versus the pre-crisis level of 2019, I mentioned. Our free cash flow or cash flow development in general is quite a success story this year. After strong development in 2023 already, we were able to reduce our net working capital by around EUR 13 million. This improvement and the strongly increased net results for the period, led to a free cash flow of EUR 14.2 million, which is EUR 2.1 million above previous year, despite the fact that we invested EUR 5.6 million more in our own manufacturing logistics than in the previous year. Those effects, combined with our strong liquidity situation overall, gave us the opportunity to propose a EUR 1.20 dividend, including a special dividend to our annual general assembly. A few words on the cash flow from financing activities. We paid EUR 10 million dividends in 2024, and we started our share buyback program in 2024, which accelerated in the last few weeks so that we managed to gain more than 8% until yesterday. On this slide, you see all the relevant effects that led to the free cash flow development. First, the improved net results, the working capital with lower trade receivables, stock levels and increased liabilities, and the EUR 14.5 million CapEx. Overall, our liquidity stays at EUR 41 million. Last but not least, I'd like to quickly explain why we slightly overachieved our guidance of EUR 12 million free cash flow that we gave in the middle of 2024. There are two main reasons. First, we expected to grow in the fourth quarter, and therefore we anticipated a bit higher trade receivables, roughly EUR 1 million, I'd say. We wanted to invest roughly EUR 1 million more than you see on that slide. We had a slight delay so that we finished those projects early in 2025. Now, thanks for your attention. I hand over to Alex again, who will give us an update on our corporate strategy and the outlook for 2025 and beyond. Great. Thank you very much, Michael. Let me come back to the strategy and give you an update and maybe also a little bit a more holistic update for the ones who are first time in the call today. We have been announcing the strategy actually a little bit less than a year ago. It has been just 11 months, but we are executing that step by step every day. I think the base for what we are doing is really that we have a very reliable core business, and that is the focus we have. Essentially, as a focus strategy, we focus on mechanical cleaning and drying, and you see the development of that business in a very constant, very reliable pace, growing a little bit above 4% year-on-year for the last 10 years. And there is a big opportunity within that segment. If we have a look here at the main European markets and our data and our estimates of these markets, we have barely a share of less than 10%. We believe that by expanding that share, we have still big opportunities because there is a lot of room for growth. Therefore, the acceleration of the growth of our core business is really at the center of our strategy. This as a base, we then believe that Leifheit has a big opportunity and potential to expand. And by four different growth drivers, that is building even stronger brands, growing outside Germany, growth coming from a new innovation strategy and from bringing innovations to market, and growth from our new e-commerce digital model. Let me briefly touch on each of the different elements. Strong brand, that is something we are working on until middle of this year, roughly. We have a very strong brand in core markets, but we definitely can expand beyond these. We stand for high quality and also reliability, longevity, and have a lot of high consumer satisfaction in these markets. Yet we believe we can position this brand also for closer to consumers, more emotional, with a more modern brand positioning. And at the same time, we do the transition to digital first to really also rejuvenate the brand. The brand is at the center. If we see where growth will come from, is definitely beyond and outside Germany. Outside Germany today is 40% of our business. In the market, if we look at the market, it is almost half, only 23%. This shows that the potential is absolutely in the bigger European markets, where our market share is still relatively small. We defined, because you have all heard about internationalization, that is not very new, but what is new is we have defined a very clear country cluster where markets are either growth or aggressive growth markets or also profit markets. We will expand the successful model of the core and also e-commerce, as you see in the France example I showed, can also be a very good entry model into markets where otherwise in brick and mortar retail, it is sometimes more challenging. So growth outside Germany. The second is innovation to really drive growth and profitability. And we have a very strong part of that on innovation. I think this has been neglected over the last years, but now we are coming back. I think it made Leifheit always strong to come back with better ideas, with stronger products. And you have the first here on the list. I spoke about the Black Line already, which is even not here. We launched POWER CLEAN, a cleaning set in the lowest price tier. Middle of last year, we revamped our window cleaning, February this year, also with a patented product. Very good products, and we are market leader in Germany, yet not in so many other markets outside. We have opportunities for growth. Then I can unfortunately not yet disclose, but we are having an excellent innovation in hand with very good feedback from consumers on the one hand, but also our customers on the other hand. We just got, 2 weeks ago, a listing in one of the big supermarkets in Germany where we have been not present, actually. It allowed us to get a first listing again for Leifheit, a big success. We look forward to share more details with you in the next call. Overall, we are reworking, or we are working on an innovation strategy, which is consumer focused, which also has clearly defined ways in order to really follow up on launches with the relaunch cycle and really make sure we are not just launching something without supporting it over a period of time. In there are also our sustainability targets. We have been speaking in one of the other calls about our sustainability ambition and our climate ambition. This will also be part of this. The example, the innovation which comes in July will be with recycled materials. Also we do steps there, which is very important for some of our customers, if not consumers. That's for the innovation part. Now this e-commerce digital model to explain this once more. We have today a share in the business of e-commerce, 22%. Comparing that to comparable other companies, we believe we have big opportunities, yet we have a strength here. We want to develop this to a share of 30% between 2027 and 2030. How do we want to do that? We've got to build on an efficient logistic network with our D2C capabilities, which are allowing us to have higher profitability on D2C compared to B2B. We shift investments from TV into digital to really measure and drive people to conversion, and then we have a lot of expansion on distribution channels. In France, for instance, we opened various new marketplaces, La Redoute as an example, or ManoMano, to also gain distribution. Then, of course, the logistic networks get more efficient because we get more packages to consumers. This is the digital e-commerce model. Obviously this is all driven by value optimization. You have been seeing our gross margin development, and despite increase in raw and pack materials, we could improve that in this period. We want to continue, significant gains out of production and logistics is, I would say, a backbone in order to drive profitable growth, which is our objective. Before I give you the outlook, I want to focus once more on our attractive capital allocation, where we are making, I think, clear statements that this is one of the core elements we want to continue to drive. How do we make sure we allocate capital in the best way? As Marco always mentions, we have a very solid liquidity position and a strong equity ratio. With this as a base, we want to focus on shareholder value, which means we have a very attractive dividend policy. You know, this is the result out of where the proposed dividend comes from. Around 75% of free cash flow or net results we will always use for dividends. We do and plan share buybacks as an active capital allocation tool and obviously, and very importantly, we want to promote innovation and obviously preserve our investment capability. We will, of course, also invest internally into growing the business. These are the elements of a strong focus on shareholder returns and shareholder value. Here, this we have spoken about already, so the proposal to the AGM of in total EUR 1.2 dividend. I think also if you compare this to the past, I think it is an excellent level of dividend payment with a very high dividend yield. Obviously, you see 7.6%. Now, let me give you, before we close and come to the Q&A, let me give you the outlook. Here, with a lot of you, we have been also in our investment talks and calls, we have always got the request, "Show us your mid-term potential." We have always been saying we want to have a first year of really developing the strategy, but now is the moment where we want to give you more tangible outlook in terms of mid and long-term potential. Before I come to the outlook, actually on 2025, is the outlook longer term. This is the chart. Let me explain this step by step to you. Overall, with the growth drivers we have seen and with the focus strategy, we believe that Leifheit has a great potential to expand. This is in here in our vision 2030, beyond 2030 plus. We want to be a European branded leader in mechanical cleaning and drying, our core categories, and we believe that by that time we will have sales above EUR 300 million and an EBIT above 10%. This is the long-term view. On the mid-term potential, we want to also give you guidance. In the mid-term potential, we see sales growth year-on-year with a CAGR of between 3%-6%. We see in the mid-term potential, an EBIT margin of approximately between 7%-10%, so significantly higher than today. You see the two phases. We are at the moment in the phase 2024-2027. The mid-term phase, where we implement the new strategy and we want to establish the focus strategy and the growth drivers I've been talking about. Then 2027-2030, when we have done that, we want to continuously build market share in the core categories towards driving this to European leadership. All right. If you have questions, we can come back to that, of course. Now let me give you the forecast for 2025. Let's go through that. For the group turnover, as I mentioned already on the first chart, but here again, we will, we target and have forecast the guidance to be between 2 and 4 percentage points above previous year. We will see solid growth in household, our core categories. We will be on par with previous year on wellbeing for the Soehnle brand as well as for the private label. As we have said, on the EBIT level, we will be in a corridor between EUR 15 million to EUR 17 million, and on free cash flow, we will be in the upper single-digit millions. Maybe to state this as well, of course, in the environment at the moment, we see that the environment overall is challenging. We spoke about consumer sentiment, and this obviously has also an impact in our business this year. We have been seeing this also in the first month. Yet, we see that we can improve our bottom line compared to last year significantly. Especially because what I was saying, I think, really the focus on core segments outside Germany, but also the e-commerce ramp-up gives us a lot of confidence to that. Obviously, the aspects which Marco has spoken about, price increase of raw materials, fluctuating container prices, and an uncertainty in the procurement markets could also have a negative impact on our earnings. All right. To summarize, why should you invest into Leifheit? I think there are at least four reasons. Number one is we have a very clear vision and strategy. Where do we want to be in 2027, but also in beyond 2030 plus? We want to be a specialist for the business for the core categories. We believe we have potential to expand on that base with the strong brands, with the growth outside Germany and Europe, with the growth via innovation and e-commerce, and with the digital acceleration. We will always look for profitable growth. We want to make continuously efforts and progress in the margin. This will be driven by lean, efficient production and logistics, and we will always have an attractive capital allocation for our shareholders. Excellent. Thank you very much. Now we look forward to your questions or your comments. Thank you, gentlemen, for the presentation. Let us jump into the Q&A session. Please use the button of your control panel to raise your hand for asking your questions, and please know that you also have to unmute yourself. If you are dialed in by phone, please press star and nine to raise your hand, and please use the combination star and six to unmute. Ladies and gentlemen, your questions, please. Let us start with Mr. Lucas Spang. Your question, please. Please go ahead. Yes. Good afternoon, gentlemen. I have three questions, and I think it's better to do them one by one. The first question is related to the bottom line. For 2025, your guidance is at least a 24% increase in EBIT. I would be interested to get a little bit more insight and feeling where this margin increase and earnings increase is coming from, and also for the years beyond 2025. If you compare the margin in 2024 versus your 10% target for 2030 and beyond, it's more than doubling the margin. Where is the most or the biggest impact in the margin increase coming from? Okay. Let me start to answer that. Thank you for the question. First of all, the most, I think, important thing is that we are focusing on our most profitable products, and that means we are focusing on our core products, and that is an essential point of our strategy, as Alex pointed out. Next thing is we're working on productivity and efficiency projects in our manufacturing, and that is especially important for D2C business. If you can get one piece out of the machinery and ship that to the end consumer and to be profitable in D2C, that's a very important thing. We have to keep our prices, at least our prices up currently. When you look at the procurement prices I mentioned earlier, 35% higher than pre-crisis levels. Those, let's say, three pillars are the most important. Of course, we are expecting growth in 2025 of 2%-4% and that will help as well. Let's view it from a more P&L perspective. Is earnings growth coming more from gross margin increase or also from SG&A or sales and marketing? To get a better feeling from that. No. Then it is the gross margin increase because of the efficiency project that I mentioned and the focus on the, let's say, high profitable core products. Okay. Then some other consumer brands or consumer companies have more or less talked about a muted start or a weak start, especially in February and also in March. So, you have also some relevant portion in e-commerce, but most of the sales is coming from retail. So what is your expectation or how was your start, if you can tell us in more terms of qualitative perspective? Yes, absolutely. Thanks, Mr. Spang, for the question. As I briefly was trying to say, maybe referring to last year first, we have been seeing, like Marco pointed out, a slowdown in the last quarter. I think this was already a first indication of a certain slowdown in sellouts, which we could see. This we saw in a certain way continuing into the first quarter. So we are not yet there where we want to be in the first quarter, to say it like this, and I think this is really relating to what you have been referring to other companies as saying. I think a lot of people speak about it. We get this a lot from our customers as well, that people, because of the uncertainty, are rather holding back at this moment of time, and this we saw in terms of sellout results as well, yes. Okay. And then in terms of CapEx, what do you expect for 2025 and beyond? I'd say roughly EUR 10 million could be a good figure to plan with in the next years. Okay, thanks. Yeah, thanks for the question. So we continue with Mr. Thilo Kleibauer. Your question, please. Yes, hello. Can you hear me? Yes. Yeah, perfect. Yeah, perfect. So thank you for the presentation. I think I have mainly two questions. Maybe we can do it one by one. First, on the top line growth, 2%-4% in the current year. You mentioned that Q1 is maybe similar to Q4 with limited growth. So where do you see growth drivers in the current year? Is it driven by the innovations, by new customer listings you mentioned? Is there maybe also an effect of price increases or product mix changes? So maybe you can give a little bit more insight into the planned sales increase in the household segment. Yeah. Thanks, Mr. Kleibauer, for the question. Yeah, absolutely. I do not want to go through all the growth drivers I have been talking about, but more specifically in this year, I think first element is definitely innovation. We see that the start with window cleaning was very positive for us, but this was just really starting. We think that the innovation which comes in July, we have a lot of positive feedback, as I mentioned, a lot of listings with customers already. I think this we will make big. This will be having an impact as well on our second semester. This may be in terms of innovation, apart from the innovations we were talking about from the previous years. We expect definitely e-commerce to pick up again. You have seen the growth last year, around 4%. If you ask me, was I very happy with that? Maybe not to the fullest extent. I think there we definitely expect more, and after some negotiations with one of the important customers, we are now also concluded that negotiation, which gives us now more room for growth again, which was limiting in the last quarter of 2024 and also January, February. There, I think, will also come growth from. Maybe the third element, obviously our expansion, distribution expansion. We have so many opportunities in distribution, but if I think about the growth markets, Eastern Europe, especially Poland, maybe we see actually very positive development. Last year already, clearly double digits, and this we expect to continue for both for stationary customers where we have big distribution opportunities, but also there on e-commerce with the marketplace, Allegro, as another example just. I think distribution is definitely also a growth lever. Yeah. Okay, thank you. This is helpful. My second question is regarding, you mentioned these innovation to come in July. You mentioned also brand modernization. Brand modernization, does it mean a kind of big bang event in the course of the year, or is this a smooth transition? In this context, more innovations, brand modernization, do you plan with a higher marketing budget in the current year, or what are your assumptions there? Yeah. Thanks. A great question. We work on the brand positioning. It will be ready middle of the year, but then the execution will start with the brand campaign for the innovation I was talking about. That will be a starting point. But then it will be done step by step. I am not sure what a big bang could look like, but we are not planning to make brand campaigns, for instance. We execute this on the product level to make it more relevant for consumers. It will have also potentially an impact on our product design. A lot of impacts on the different levers there. Overall, the marketing budget, I think the objective first is to make it as efficient as possible. We do this with a digital investment, which we believe we can track. We can see what works, what doesn't, so we can correct, we can measure that much better than other investments. It's more the focus really making the money work harder for us. The marketing budget this year is a similar level than last year. Okay. Thank you. If I may, one final question from my side. The 10% EBIT margin ambition, which is a kind of mid to long-term scenario. Maybe what are the key drivers? Is it fair to assume that this implies a kind of gross margin increase or gross margin up to 48%-49%, or a similar scenario? Thank you for the question. Yes, of course. There are, let's say, many pillars that will lead to the 10% EBIT margin ambition, like you said. First of all, we don't see that the good margin development that we saw in the last two years, in 2023 especially, but then went on in 2024, that's not the end of the line. We are working on that in 2025 as well, and that will go on from our perspective, of course. Good innovations like the one that we are talking about in July, but also the ones which we are launching last year, will help there as well. From our perspective, margin development, very important, but we have other efficiency drivers, not only the growth, but our growth and efficiency drivers that will help us there. As well as, let's say, cost reductions overall in the company that we're working on. We have to get more efficient, of course, and therefore save costs in the long run and therefore get to that EBIT margin. Maybe just to add one aspect, which I think is also critical for our business is, pricing strategy. Pricing strategy is highly related to e-commerce, where with a selective distribution approach, obviously in a compliant way, we can control the pricing much more if we do this with a D2C model. But overall, having a more sophisticated, more advanced pricing strategy will help us also, without price increases, by just managing or improving the margins due to that. That's another element. Okay, perfect. Thank you very much. Thank you, Mr. Kleibauer. Mr. Spang, you are still raising your hand. Any follow-up questions from your side? Okay, this is not the case. So once again, please raise your hand to ask a question or use the Q&A function to send us your questions. We continue with Mr. Klaus Breidenbach. Your question, please. Please unmute yourself. Hello, can you hear me? Yes. Hello. It's Klaus Breidenbach from ODDO BHF. I have a couple of questions. The first one is regarding the EBIT margin development in 2025. Is Q1 the low point of the year, and if yes, why? Regarding EBIT margin, the low point of the year. That's actually a good question. The thing is, in quarter one, you see that when you look at the phasing of the sales volume that Leifheit has, then in the first 3 months, the most important is the March, and then come the months April and May, which are very strong in overall sales volume or overall revenue. Therefore, quarter 2 is regarding the EBIT margin or overall revenue development, much more important than quarter 1. Therefore, could be that because of the phasing, the EBIT margin in the first quarter is not at that level. There would be a if-then after the first 5-6 months, and when we look at the end of June, maybe it's better then. But that has to do with the phasing of the revenue, basically. Okay, got it. A second question is on your turnover by region. Do you expect a similar development as in 2024 when Germany was down? I mean 2025, what is your turnover expectation by region? Yeah, thanks, Mr. Breidenbach, for the question. No, definitely what will be different is we will not see another development like this in Germany. That is, I think, quite clear. That was a one-off impact. We are now actually, in the last month, we have significant improvement already in Germany. So this will be definitely different. Otherwise, I guess it will be more balanced across the regions, the development. With the development, we always have to keep in mind this e-commerce, the invoicing from different markets, which always dilutes the picture a little bit. But overall, the development in Germany, we definitely will see a positive development in Germany, and it will be more balanced across the regions. This is what we estimate at the moment. Okay. Thank you. Thanks, Mr. Breidenbach. Please raise your hand to ask a question or use the Q&A function. Mr. Breidenbach, you are still raising your hand. Any follow-up questions from your side? This is not the case. Any further questions, please raise your hand or use the Q&A function. There do not seem to be any further questions for today. Mr. Reindler, Mr. Keul, your closing words, please. Yes, thank you very much. First of all, thanks a lot for the questions. We enjoyed that. Thank you for participating today in the call. We want to talk about two elements today. I think, first of all, more in detail about the results from 2024, which I think on the bottom line has been very strong results. On the top line, I think we have not been fully satisfied with last year. The second element is giving you a long-term or midterm perspective, which was very important for us today, together with the guidance for this year. In that, we definitely want to show our ambition to be a specialist in the core segment and drive growth via this with innovation and with a much better consumer focus. We want to expand our European presence with strengthening our brand, as we spoke about, and especially with e-commerce. As this, we want to develop Leifheit also in a more resilient way, which is definitely very important in the environment we are in. All in all, really giving you, I think, a very positive outlook for this year, but also, I think, a very interesting and ambitious outlook for mid and long term. Thank you very much from our side. Thanks for participating and see you and hear you hopefully next time. Thank you. Thank you, gentlemen. We now close the conference call. Goodbye.