TAKKT continuing on growth track
Turnover and earnings increased – positive outlook for 2006
“TAKKT Group again exceeded expectations in 2005 and laid the foundations for future growth”, explained Georg Gayer, CEO of TAKKT AG, at the financial statements press conference. The international B2B mail order group increased its turnover of office, business and warehouse equipment by 6.3 percent, from EUR 727.6 to 773.2 million. In currency-adjusted terms this is an increase in turnover of 5.9 percent. All three Group divisions contributed to this increase.
“Despite generally weak economic development, TAKKT grew significantly better than the economies we are operating in”, explains Gayer. TAKKT’s earnings improved over-proportionately. EBITA improved to reach EUR 88.9 (78.2) million, which pushed up the EBITA margin from 10.7 to 11.5 percent. This puts the company slightly above the targeted EBITA corridor of between nine and eleven percent.
“Our success is based on the fact that we have done our homework in purchasing and compiling product ranges, and have therefore been able to boost gross profit margins. We have also continued to improve the efficiency of our processes”, CFO Dr Florian Funck explains TAKKT’s profitable growth. Profit before tax was up by 52.7 percent and reached a new record at EUR 78.7 (51.5) million. In addition to improved operating profitability the first time adoption of the international financial reporting standard IFRS 3 contributed to increasing profit before tax, as scheduled goodwill on amortisation is no longer permissible from 2005 onwards.
KAISER + KRAFT EUROPA is extremely profitable
The division KAISER + KRAFT EUROPA turned over EUR 401.3 (379.5) million in 2005. In a year-on-year comparison this amounts to an increase of 5.7 percent. All subsidiaries have contributed, in particular Japan, France and Scandinavia. Germany also met expectations. Despite the planned expense for entering new markets the division’s profitability increased further. KAISER + KRAFT EUROPA improved its EBITA from EUR 61.2 to 65.6 million with its EBITA margin rising from 16.1 to 16.3 percent accordingly.
Positive development at Topdeq
Topdeq reached a turning point in 2005. The division achieved double-digit growth of 10.0 percent with turnover reaching EUR 82.1 (74.6) million. This increase can be attributed to its successful positioning as a premium brand. Furthermore this development indicates that the European office furniture market is recovering after being in crisis for a number of years. Companies in all countries increased their turnovers with the exception of Topdeq Germany. Thanks to the higher gross profit margin and better capacity utilisation EBITA improved from EUR minus 2.2 to plus 1.0 million which also improved the EBITA margin up from minus 2.9 to plus 1.3 percent.
K + K America records healthy growth
TAKKT’s third division, K + K America, also recorded positive increases. Despite the US economy cooling down, turnover was up by 6.0 percent, from EUR 273.5 to 290.0 million. All companies in the division contributed to this growth. EBITA reached EUR 30.1 (26.9) million, which pushed the EBITA margin to 10.4 (9.8) percent.
Business further expanded
Internationalisation was a key issue for TAKKT in 2005. The Group founded new subsidiaries in five countries: Belgium, Canada, China, Romania and Turkey.
In addition to entering new markets, TAKKT also expanded its business by acquisition. National Business Furniture (NBF) Group has been part of the K + K America division since 2 January 2006. NBF is the US market leader for B2B office furniture mail order. At the financial statements press conference Gayer explained that this acquisition resulted in TAKKT optimising its portfolio in three dimensions. Firstly, the mail order Group is enhancing its office furniture product range in North America. Secondly, TAKKT is expanding its customer base with customers from the service sector, which is showing strong growth in the USA. Thirdly, the split of regional business is optimised as K + K America will be generating a turnover in 2006 which will almost equal the turnover of KAISER + KRAFT EUROPA.
Financial structure of the Group continues to be healthy
Thanks to the healthy earnings situation TAKKT Group’s equity also increased. As of 31 December 2005 its equity ratio without minority interest was 46.1 (39.6) percent, giving TAKKT an excellent foundation to continue to operate successfully and grow dynamically.
In order to ensure that shareholders participate in the company’s success appropriately, the Management Board will propose a dividend of 15 cent per share at the Annual General Meeting. “Including the NBF acquisition the equity ratio would be at around the level of the previous year. We therefore recommend that the dividend remains at 15 cent”, explained Funck.
Positive outlook
In 2005 TAKKT laid the foundation for the company’s continued success by founding companies in five countries on three continents and by acquiring NBF. “We are planning organic, currency-adjusted growth of four to five percent for 2006. Including NBF Group, the turnover generated by TAKKT Group will increase by at least 18 percent”, noted Gayer. He is also expecting TAKKT to continue being highly profitable. As a result of adopting IFRS 3, TAKKT will be using EBITDA as the key operating figure for profitability. This will ensure that existing companies and new acquisitions are comparable. Management is expecting operating profits to be at the top end of the EBITDA target corridor of between ten and twelve percent.
Figures for Q1 2006 will be published on 4 May. The company will be holding its Annual General Meeting on 31 May in Ludwigsburg, close to Stuttgart.
Short profile of TAKKT AG
TAKKT AG is the leading B2B mail order company for office, business and warehouse equipment in Europe and North America. The Group is represented in more than 25 countries with its brands. More than 100,000 products make up the product range of its subsidiaries and cover the areas business and warehouse equipment, traditional and design-oriented office furniture and accessories, occupational safety products and sales promotion articles for retailers as well as the food service and hotel market.
TAKKT AG employs about 2,000 members of staff, has more than two million customers worldwide and distributes more than 55 million catalogues and mailings every year.
The company is listed on the SDAX and was admitted to Deutsche Boerse’s Prime Standard on 1 January 2003.
Stuttgart, 23 March 2006
Contacts:
Georg Gayer, CEO
Phone +49 711 34658-201
Dr Florian Funck, CFO
Phone +49 711 34658-207