Speech of Dr Felix A. Zimmermann

Board Member for Finance and Controlling

Financial Statements Press Conference of TAKKT AG on 21 March 2002 in Stuttgart

Only the spoken word applies

Ladies and Gentlemen,

As Mr. Gayer already explained in detail, we grew a respectable amount in 2001. Our turnover increased 8 percent to EUR 824.1 million. Compared to previous years, however, it is clear that the difficult economic environment left its mark on us as well.

As a reminder: In the past 15 years, we have grown at an average rate of 15 percent annually. Of this growth, 7.5 percent was organic and 7.5 percent was due to acquisitions.

TAKKT group turnover - 8 percent growth

In 2000, we achieved an increase of 21.5 percent (from EUR 627.6 million to 762.8 million). Hubert already had a positive effect here. In this time period, we also attained the highest organic growth of the last 15 years, with 11.4 percent.

In 2001, there was a distinct lack of organic growth, which was caused by the weak economy. Thanks to Hubert, however, the group achieved higher turnover than in 2000. Without the acquisition of Hubert, and not adjusted for currency effects, turnover would have declined by 2.7 percent.

Distribution of turnover - Balance between North America and Europe

In 2001, group turnover was distributed nearly equally between North America and Europe. In North America alone, the share of turnover was 44 percent. Topdeq USA contributed to this for the first time. Within Europe, Germany was our strongest market, with a turnover share of 25.3 percent. The remainder of Europe accounted for 30.7 percent of turnover. We therefore moved a step closer to our goal of attaining a regionally balanced portfolio.

Europe remains the strongest group

If we segment the overall turnover according to our business divisions, it becomes clear that there were no significant shifts. This is also due to the fact the companies which were newly established in the past year did not yet have any noticeable effect, of course.

The KAISER + KRAFT EUROPA division achieved 46.5 (48) percent of the turnover. Topdeq contributed 10.1 (12) percent and K + K America 43.4 (40) percent.
Within the product groups, business equipment was responsible for the greatest turnover, with over 50 percent. The remainder was distributed nearly equally among office equipment, work safety products, design-oriented office furniture and accessories, and Hubert's equipment and supplies for food service retailers and restaurants.

If you compare this distribution of turnover to earlier years, you can see how we have systematically diversified our product range in the past years. This has enabled us to acquire new customer groups and make the TAKKT group more independent of trends and the economy. The examples of Hubert and Conney Safety Products, which had a stabilising effect on the portfolio in a very weak economic environment, are proof that our strategy is correct.

Gross profit margin

As you can see, the gross profit margin remained stable at a high level for a long period of time due to our product portfolio, which is not susceptible to price fluctuations. Despite the difficult environment, we were able to increase this margin by almost one percentage point to 39.4 percent.

EBITDA - Good margin despite new companies and weak economy

Before we turn to the result, I should note that the EBITDA - that is, earnings before interest, taxes, depreciation and amortisation - is the key figure which represents the earning power of our company, independent of the financing structure and depreciation and amortisation. Special items which influence the result, such as the spin-off from GEHE and the acquisition of Hubert, are thus eliminated.

In 2001, our EBITDA declined for the first time. It decreased from EUR 87.6 million to 84.0 million. Mr. Gayer already explained the reasons for this decline, but I would like to reiterate that the decline in the EBITDA was influenced by various factors:
· the planned start-up losses for the newly established Topdeq USA, KAISER + KRAFT Portugal and KWESTO Poland,
· and the cost of mailing the first Hubert catalogues in Canada and KAISER + KRAFT catalogues in Ireland.
· At the same time, the decrease in the turnover of the established companies had a negative effect.

But despite the decline, our EBITDA in the year under review was still far higher than the figures we attained in 1999 and earlier:

2001: EUR 84.0 million
2000: EUR 87.6 million
1999: EUR 70.5 million
1998: EUR 65.1 million
1997: EUR 52.0 million

In all of these years, the respective EBITDA margins were within the long-term target corridor of 10 to 12 percent (only in 1998 there was a positive exception above 12 percent):

2001: 10.2 percent
2000: 11.5 percent
1999: 11.2 percent
1998: 12.1 percent
1997: 11.1 percent

The fact that we were able to keep the EBITDA margin in this target corridor in 2001 was a great success - and proof of our steady profitability.

EBIT - Hubert acquisition affects comparability

Due to the Hubert acquisition and the amortisation of goodwill connected to it, the EBIT (earnings before interest and taxes) cannot be compared to the figures from the year before.

The EBIT declined in 2001 by 18.6 percent to EUR 53.8 million. Amortisation of the Hubert goodwill in the amount of EUR 9.8 million affected the entire year for the first time, which burdened the EBIT accordingly. I should remind you that Hubert was acquired at the end of 2000. In 2001, the EBIT margin was 6.5 percent.

2001: EUR 53.8 million (EBIT), 6.5 percent (EBIT margin)
2000: EUR 66.1 million (EBIT), 8.7 percent (EBIT margin)
1999: EUR 56.5 million (EBIT), 9.0 percent (EBIT margin)
1998: EUR 58.8 million (EBIT), 10.9 percent (EBIT margin)
1997: EUR 46.2 million (EBIT), 9.8 percent (EBIT margin)

Earnings before taxes - Affected by depreciation, interest and economic situation

The non-comparability of the EBIT with the figures from the year before also applies to the following key figures. In addition to the depreciation, there were also interest charges connected to the acquisition which were incurred in the full amount of EUR 12.1 million for the first time in 2001.

Profit before taxes fell from EUR 53.8 million to 33.4 million.

2001: EUR 33.4 million (Profit before taxes), 4.1 percent (Margin)
2000: EUR 53.8 million (Profit before taxes), 7.1 percent (Margin)
1999: EUR 50.5 million (Profit before taxes), 8.0 percent (Margin)
1998: EUR 57.8 million (Profit before taxes), 10.7 percent (Margin)
1997: EUR 45.5 million (Profit before taxes), 9.7 percent (Margin)

Profit after taxes

Profit after taxes, which is also not comparable to previous years, fell from EUR 33.6 million to 18.9 million.

2001 EUR 18.9 million (Profit after taxes), 2.3 percent (Margin)
2000 EUR 33.6 million (Profit after taxes), 4.4 percent (Margin)
1999 EUR 31.9 million (Profit after taxes), 5.1 percent (Margin)
1998 EUR 29.5 million (Profit after taxes), 5.5 percent (Margin)
1997 EUR 25.1 million (Profit after taxes), 5.3 percent (Margin)

The taxation ratio in the year under review was higher than in the year before. This difference can be accounted for in the following way: In the TAKKT group, the planned start-up losses for newly established companies are not set off against the profits of our established companies, but rather carried forward as tax-deductible losses. In comparison to previous years, the planned losses of the newly established companies were relatively high. With nearly stable tax rates on the profits of the established companies, the taxation ratio therefore increased from 37.6 percent to 43.6 percent. I would like to stress here that the tax deductibility of the losses carried forward will be realised in the coming years, so the taxation ratio in the group will go down again in the mid-term.

In the year under review, the earnings per share amounted to 26 (46) cents.

In view of the economic situation, our investments in newly established companies and the special effects of the acquisition of Hubert, our earnings situation in 2001 can be considered satisfactory.

Employees - Growth through acquisition

In step with our business development, we only marginally expanded our personnel capacity. New employees were hired primarily for the newly established companies and our expanded central warehouse in Kamp-Lintfort. As of 31 December 2001, 1,964 people were employed on a full-time basis for the TAKKT group.

Employees (Full time):
2001: 1,964
2000: 1,931
1999: 1,546
1998: 1,465
1997: 1,152

Our employees are an important value driver for the TAKKT group. We therefore invested almost one million euros in the training and further education of our employees in the year under review. This included seminars for managers, IT courses, language courses and sales training.

KAISER + KRAFT EUROPA - Largest share of turnover within the TAKKT group

Let us leave the group level for a moment and analyse how turnover and the EBITDA developed in the individual business divisions.

KAISER + KRAFT EUROPA was able to increase its turnover by 4.6 percent to EUR 383.3 million and thus assert its strong position in the B2B mail-order business for office, business and warehouse equipment. The EBITDA improved from EUR 52.3 million to 55.6 million; this is an increase of 6.3 percent. The companies in Switzerland, Italy and France contributed a large share to this growth in turnover. Only the companies in Scandinavia, the Czech Republic and Poland could not attain their turnover budgets.

2001: EUR 383.3 million (Turnover), EUR 55.6 million (EBITDA)
2000: EUR 366.4 million (Turnover), EUR 52.3 million (EBITDA)
1999: EUR 326.5 million (Turnover), EUR 43.6 million (EBITDA)
1998: EUR 313.0 million (Turnover), EUR 40.3 million (EBITDA)
1997: EUR 260.8 million (Turnover), EUR 29.9 million (EBITDA)

Topdeq - Burdened by special item and economy

Topdeq, our forerunner in growth in the past years, developed less positive in 2001. Turnover declined by 4.8 percent to EUR 82.9 million. The EBITDA shrank from EUR 8.4 million to 0.4 million.

There were various reasons for this setback:

Firstly: In the past, many young, fast-growing companies, particularly those in the "New Economy", gave preference to the design-oriented products from Topdeq. The deterioration of the business of these companies also led to a decline in order volume for Topdeq.

Secondly: As you can see from the chart, the comparison year 2000 was exceptionally good. Topdeq celebrated its 10-year anniversary in 2000, which enabled the company to conduct special advertising and sales events. The high additional turnover achieved in this way could not be upheld in 2001.

Thirdly: Topdeq Germany was affected not only by the generally weak economy but also by more intense competition - compared to the year before - as other companies in the field attempted to copy Topdeq's successful business model. The strengthening process that is planned for 2002 should put the business division in a position to attain a positive growth again in future.

The primary reasons for the decline of the EBITDA were the planned start-up losses for the new establishment of Topdeq USA and the weak business performance in Germany and Switzerland.

The Topdeq companies in the USA and France performed well from the start. Turnover at least remained stable in the Netherlands. The Swiss company, like the German one, suffered losses, however.

2001: EUR 82.9 million (Turnover), EUR 0.4 million (EBITDA)
2000: EUR 87.1 million (Turnover), EUR 8.4 million (EBITDA)
1999: EUR 73.0 million (Turnover), EUR 9.3 million (EBITDA)
1998: EUR 63.0 million (Turnover), EUR 8.3 million (EBITDA)
1997: EUR 53.3 million (Turnover), EUR 4.5 million (EBITDA)

K + K America - Acquisition and weak economy

Due to the first full consolidation of Hubert, the turnover of K + K America was 15.7 percent more than in the year before. Turnover amounted to EUR 357.9 million. The EBITDA remained nearly stable at EUR 33.7 million. Without Hubert, turnover would have been EUR 255.5 million - a decrease of 11.4 percent.

The development in the USA underlines how important great product diversification is for our business. The slump of the US economy affected the individual subsidiaries to varying degrees. While C&H Distributors experienced a larger drop in turnover, Avenue Industrial Supply, Conney Safety Products and Hubert were comparatively less affected by the economic development.

Turnover
2001: EUR 357.9 million (Turnover), EUR 33.7 million (EBITDA)
2000: EUR 309.3 million (Turnover), EUR 33.8 million (EBITDA)
1999: EUR 228.0 million (Turnover), EUR 23.1 million (EBITDA)
1998: EUR 163.2 million (Turnover), EUR 16.5 million (EBITDA)
1997: EUR 155.4 million (Turnover), EUR 17.4 million (EBITDA)

Cash flow - Solid despite weak economy

For years, the earning power of our group has been characterised by a high cash flow. This was also the case in 2001. Despite the weakness of the economy, we had a solid cash flow of EUR 49.1 million.

Cash flow:
2001: EUR 49.1 million
2000: EUR 55.1 million
1999: EUR 45.8 million
1998: EUR 35.9 million
1997: EUR 30.9 million

Capital expenditure normal

After the exceptionally high capital spending of the last three years - due primarily to acquisitions - investments in the year under review swung back to their average, normal level. In total, we invested EUR 12.5 million. EUR 9.8 million of this went to tangible assets. These investments were made mainly in the further optimisation of our e-commerce structures and the expansion of our services. EUR 2.6 million flowed into intangible assets.

Investments:
2001: EUR 12.5 million
2000: EUR 168.9 million
1999: EUR 121.1 million
1998: EUR 73.8 million
1997: EUR 5.6 million

High free cash flow ensures future growth financing

Thanks to our constant budget for investment in maintenance and rationalisation and our lack of investments in acquisitions, we achieved a positive and high free cash flow of EUR 36.8 million in 2001. We therefore have sufficient liquidity both to amortise debts according to plan and to finance our desired organic growth from earnings.

Free cash flow:
2001: EUR 36.8 million
2000: EUR -113.8 million
1999: EUR -75.3 million
1998: EUR -37.9 million
1997: EUR 25.3 million

Group balance sheet of TAKKT AG - Solid structure

On the assets side of the balance sheet, the planned amortisation of goodwill lowered intangible assets. Fixed assets were therefore reduced from EUR 386.7 million to 371.8 million. Inventories and trade debtors were reduced due to the economic situation. Current assets declined accordingly from EUR 178.8 million to 169.2 million.

EUR 10.8 (25.5) million of group net income was applied to the general reserves so that, as of the balance sheet date, equity rose from EUR 128.1 million to 139.5 million. We reduced the net financial debt to EUR 324.3 million.

Total assets sank from EUR 569.3 million to 544.6 million. Based on the increased equity, our equity ratio improved to 25.6 percent. In 2000, it was 22.5 percent.

Financial year 2001 in year on year comparison

If we look at the primary key figures for the financial year, we can see that our group asserted itself well in a difficult year. Although we could not distance ourselves from the development of the economy, we were at least able to limit its effects. Our turnover increased by 8 percent. The EBITDA margin is at 10.2 percent and therefore within our long-term target corridor. After years of expansion, we have an above-average market position. Because we continued to invest in the acquisition of new customers, the optimisation of our processes and structures and the establishment of new companies in the difficult year 2001, we are heading into the year 2002 stronger than we were before.

Outlook 2002 - Change in reporting

As of the first quarter 2002, TAKKT AG will carry out its accounting using international accounting standards, in accordance with the rules in force in the SMAX segment. We have decided to implement International Accounting Standards, or IAS (soon to be IFRS, or International Financial Reporting Standards). We will explain the details of this financial reporting and its effects when we report on the first quarter of 2002. This much I will say now: the conversion will not hold any unpleasant surprises. On the contrary: the new accounting standards will have a positive effect on the TAKKT figures.

The German Stock Exchange wants to reduce the SDAX to 50 companies from mid-2002 and, at the same time, base the share index on a free float weighting. Because we fulfil the requirements connected to this change, our share will remain on the SDAX after this reference date. After all, we are convinced that quality will win out on the capital market. Quality also demands that we report transparently on company developments. We have done this in the past, and we will continue to do so in the future.

Thank you very much for your attention. We will now be happy to answer any questions you may have.

Contact:

Georg Gayer
Tel.: (49) 711 / 5001-239
Dr. Felix A. Zimmermann
Tel.:(49) 711 / 5001-861