Press release

Marked increase in the result after tax by 26.2%
TAKKT AG performs well in a difficult environment in 2002

TAKKT AG posted a decline in turnover in the 2002 financial year, but at the same time was able to increase profitability. Turnover sank by 4.9% percent to € 783.7 million (€ 824.1 million). This was primarily due to a lower order value, as a result of economic conditions and the weak US dollar. The result after tax increased by 26.2% to € 24.5 million. The Annual General Meeting will propose a dividend of 10 cents per share. At the financial statements press conference in Stuttgart, Georg Gayer, chairman of the management board, commented as follows on the results: “Despite the difficult economic situation TAKKT AG has succeeded in increasing profitability and strengthening its position on the market”.

The generally weak economy characterised the business of the subsidiaries in North America and Europe
In the past financial year the KAISER + KRAFT EUROPA division recorded a decline in turnover of 4.2% to € 367.2 million (€ 383.3 million). Group EBITDA, however, climbed 3.0% to € 60.5 million (€ 58.7 million). Business in Germany was disappointing whereas the subsidiaries in Spain, France and Austria turned in convincing performances. The new company founded in Portugal and the catalogue mail-order business in Ireland developed well, and the KWESTO subsidiaries in the Czech Republic, Poland and Slovakia also achieved satisfactory results.

Revenues at Topdeq, the mail-order company for design-orientated office furniture and accessories sank by 4.4% to € 79.3 million (€ 83.0 million). In France Topdeq achieved significant growth, the youngest start-up in the USA outperformed its own target – despite the difficult situation – even though this had been set at a high level. This was, however, not sufficient to compensate entirely for the consequences of the poor economic situation in Germany and in Switzerland. The impact of revenue development on the Topdeq result was offset by the increase in efficiency in the catalogue mail-order business and the alignment of capacity to the course of business. EBITDA totalled € 0.2 million (€ 0.7 million).

K + K America maintained turnover at almost the same level – calculated in dollars – at USD 318.0 million (USD 320.5 million) and increased EBITDA by 3.8% to USD 30.5 million (USD 29.4 million). As a consequence of the development in the exchange rate K + K America posted a turnover decline of 5.7% in euros to € 337.4 million (€ 357.9 million), with EBITDA remaining almost unchanged at € 32.3 million (€ 32.8 million). Of the subsidiaries in North America the performance of Hubert, acquired in October 2000, was once again particularly convincing. Avenue Industrial Supply in Canada also posted a positive turnover development. Conney Safety Products reported a slight decrease in turnover, but was able to contribute to the stabilisation of the group portfolio. Weaker figures were reported at C&H Distributors. The company predominantly serves the manufacturing trade and was thus influenced to a greater extent by the economic trend.

Marked increase in profit before and after tax
The gross income margin of the TAKKT group increased in the year under consideration to 40.0% (39.5%). “We owe this to the stable prices of our product range, which generally tends to be unsusceptible to price changes”, said Dr. Felix A. Zimmermann, board member for finance and controlling, at the financial statements press conference. EBITDA, was down by 1.1% to € 85.7 million (€ 86.6 million). On the other hand, the EBITDA margin increased to 10.9% (10.5%) and was thus within the long-term target corridor of between 10% and 12%.

Group EBIT remained relatively stable in spite of the decline in turnover and totalled € 57.0 million (€ 57.7 million). The margin improved somewhat to 7.3% (7.0%). The pretax result increased considerably – by 9.7% to € 39.0 million (€ 35.5 million), net profit for the year after tax was up 26.2% to € 24.5 million (€ 19.4 million). In this area the group benefited not only from the decreased interest charges but also from the drop in the tax rate to 37.2% (45.4%). Earnings per share rose to 33 (26) cents.

High cash flow demonstrates group earnings power
At € 53.0 million (€ 48.3 million), TAKKT AG once again generated a high cash flow in 2002. Free cash flow reached € 44.4 million (€ 24.4) million. Dr. Felix A. Zimmermann commented upon the figures presented as follows: “The cash flow increase of 9.6% is further demonstration of the earnings power of the TAKKT group. As a result, the group had sufficient liquidity to reduce debt as planned and finance future growth.”

Increased equity ratio
Fixed assets sank as a result of currency effects and scheduled depreciation, current assets were also down due to exchange rate developments. The balance sheet total was down, slipping 9.9% to € 540.4 million (€ 599.6 million). Consolidated net income for the year (after minorities) increased equity to € 149.6 million. The equity ratio improved to 27.7% (24.8%). As a consequence of the changes in exchange rates and planned repayments indebtedness in euro was reduced considerably: interest-bearing liabilities totalled € 291.3 million (€ 357.0 million) as at the reporting date. Investment was at a normal level and totalled € 8.6 million (€ 24.0 million).

Share buyback planned
The management board will propose to the Annual General Meeting to pay an unchanged dividend of 10 cent for the 2002 financial year. The Annual General Meeting is also to take a resolution on a share buyback programme, which will enable the company to repurchase a maximum of 10% of the shares. TAKKT AG would then have the possibility of reacting at short notice to negative developments on the capital market that could follow the conversion of a convertible bond on TAKKT shares in November 2003. The conversion of the convertible bond issued by the AXA group in 1998 could lead to up to 10% of the TAKKT shares coming onto the market at short notice. Should TAKKT AG purchase own shares in the course of the conversion these are to serve as an acquisition currency. The primary goal of the group is, however, to win external investors for the converted shares in order to thus increase the free float. An extensive and intensive roadshow is planned for this purpose prior to the conversion date. The attractiveness of the share is underpinned by its acceptance into the Deutsche Börse Prime Standard and by its continued inclusion in the SDAX.

Stable margins anticipated for 2003
TAKKT AG forecasts another difficult year but nevertheless intends to grow organically in 2003. Taking into consideration the global economic situation, the management board anticipates that growth adjusted for currency effects will fall within a target corridor of between 3% and 5%. While it is possible that a continuing weakness of the US dollar could negatively impact turnover calculated in euro, the margins of the group would remain unaffected by this. For this reason TAKKT AG is retaining its EBITDA margin objective of between 10% and 12%.

Stuttgart, 24 March 2003

The figures for the first quarter of 2003 will be published on 29 April 2003.
The Annual General Meeting is to take place on 6 May 2003 in Ludwigsburg.

Contact:

Georg Gayer 
Phone:   +49 (0)711 3 46 58–201

Dr. Felix A. Zimmermann 
Phone:  +49 (0)711 3 46 58–207