Press release
Hubert acquisition positively affects group turnover. TAKKT AG delivers satisfactory result in 2001
Despite the world-wide economic slump, TAKKT AG asserted itself well in financial year 2001. Due to the first full-year's consolidation of Hubert, the US mail-order specialist for the food service industry, group turnover rose by 8.0 percent to EUR 824.1 (762.8) million. The economic situation, the planned start-up losses for the newly established companies and the cost of mailing the first catalogues to Canada and Ireland reduced the EBITDA by 4.1 percent to EUR 84.0 (87.6) million. However, at 10.2 percent, the EBITDA margin remains within the long-term target corridor of 10 to 12 percent.
"In light of the weak global economy the investment in newly established companies and the acquisition of Hubert, the result for 2001 is satisfactory," said Georg Gayer, chairman of the management board of TAKKT AG, at the financial statements press conference in Stuttgart. "Our broad product portfolio has proved its value in the face of the parallel downturn of the economy in North America and Europe."
Subsidiaries could not avoid negative economy
KAISER + KRAFT EUROPA, consisting of KAISER + KRAFT, Gaerner, Gerdmans and KWESTO, increased its turnover in the year under review by 4.6 percent to EUR 383.3 (366.4) million. The EBITDA improved from EUR 52.3 million to 55.6 million. Most of the established KAISER + KRAFT companies achieved good results despite the weak economy. Only the companies in Scandinavia, the Czech Republic and Poland did not attain their turnover budgets.
With turnover of EUR 82.9 (87.1) million, Topdeq - the mail-order business for design-oriented office furniture and accessories - was unable to follow up on the growth of previous years. The weakness of the New Economy also negatively affected Topdeq and led to a decrease in order volume. The EBITDA amounted to EUR 0.4 (8.4) million. The reasons for this decline were the lower turnover and the planned start-up losses for the new establishment of Topdeq USA.
Thanks to the first full-year's consolidation of Hubert, the company acquired in October 2000, K + K America was able to increase its turnover by 12.2 percent compared to the year before. Turnover amounted to USD 320.5 (285.6) million. The EBITDA remained nearly stable at USD 30.2 (31.3) million. In euros turnover was EUR 357.9 million. C&H Distributors, which primarily supplies business and warehouse equipment to the processing industry, experienced a larger drop in turnover. However, Hubert (offering equipment and supplies for food service retailers and the food service industry), Conney Safety Products (a mail-order business for work safety products) and the Canadian company Avenue Industrial Supply (which supplies business and warehouse equipment, including packing material and work safety products) were not affected as strongly.
Stable products ensure steady gross profit
The EBIT (earnings before interest and taxes) declined by 18.6 percent to EUR 53.8 (66.1) million. The EBIT and the pre-tax profit cannot be compared to the year before due to the acquisition of Hubert. Amortisation of Hubert goodwill placed a EUR 9.8 million burden on the EBIT. Earnings before taxes amounted to EUR 33.4 (53.8) million. Interest charges in connection with the acquisition of Hubert amounting to EUR 12.1 million were incurred in full for the first time, thus reducing profits. Group profits after tax decreased to EUR 18.9 (33.6) million. Earnings per share reached 26 (46) cents.
The gross profit margin rose by nearly one percentage point to 39.4 percent. "Our focus on stable products which ensure a stable gross profit margin paid off in the year under review," said Dr. Felix A. Zimmermann, the management board member for finance, commenting on the figures for the entire year.
Strong cash flow
TAKKT retained its strong cash flow in 2001. Although at EUR 49.1 (55.1) million, the cash flow remains below the figure of the previous year, the free cash flow rose to EUR 36.8 (minus 113.8) million. TAKKT therefore has sufficient liquidity to amortise debts and finance the desired organic growth from earnings.
Net financial debt reduced
Both fixed assets and current assets decreased. Liabilities were reduced and equity increased. Overall, as of 31 December 2001, total assets were EUR 544.6 (569.3) million, and therefore somewhat lower than in the previous year. Depreciation and amortisation increased with the inclusion of Hubert's amortisation for a full year by 40.5 percent to EUR 30.2 (21.5) million. EUR 10.8 (25.5) million of the consolidated net income was applied to the general reserves so that equity rose to EUR 139.5 (128.1) million and the equity ratio reached 25.6 (22.5) percent. The net financial debt was reduced to EUR 324.3 million.
Capital expenditure normal
After the high capital spending of the previous year, which included the acquisition of Hubert, the investment budget returned to a normal level at EUR 12.4 (168.9) million. EUR 9.8 million was invested in tangible assets. The most important projects were the optimisation of e-commerce structures and the expansion of services.
Dividend
At the Annual General Meeting, the management board will propose to strengthen equity by increasing the general reserves and to pay a dividend of 10 cents per share as in the prior year.
Sustainable growth in 2002
Assuming that there is an upswing in the North American economy towards the middle of the year and that the overcast economic situation in Europe does not worsen, the management board of the TAKKT group is assuming an organic growth of 5 to 7 percent for 2002 and a long-term EBITDA margin of 10 to 12 percent.
The quarterly figures will be announced on 3 May 2002. According to SMAX rules, these figures will then be reported under International Accounting Standards for the first time.
The Annual General Meeting will take place on 7 May 2002 in Ludwigsburg, Germany.
Stuttgart, 21 March, 2002
Contacts:
Georg Gayer
Phone +49 (0)7 11.50 01-239
Dr. Felix A. Zimmermann
Phone +49 (0)7 11.50 01-861