Half-year sales up 17 percent
The positive development of the business activities of the Stuttgart-based TAKKT AG, previously the mail order branch of the GEHE AG, was maintained during the first half of 1999. Compared with the previous year, half-yearly sales were up 17 percent from DM 526.9 million (EURO 269.4 million) to DM 616.6 million (EURO 315.3 million). Pre-tax earnings rose from DM 41.3 (EURO 21.1 million) to DM 46.3 (EURO 23.7 million).
Since July 1, 1999, the former mail order division of the GEHE AG has been operating as an independent company. The TAKKT AG is the lead-ing business-to-business mail order company for office, business and warehousing equipment in Europe and North America. The company is also anticipating continued strong growth during the second half of 1999. With the stock exchange listing, TAKKT AG shares will be quoted on both the Frankfurt and Stuttgart stock exchanges from September 15 of this year onward.
Last year's new acquisitions played a decisive role in the company's powerful performance. In 1998, the company took over the Scandinavian Gerdmans Group and the US firm of Conney Safety Products. At the same time, the Topdeq business unit made excellent progress. In the opinion of CFO Dr. Felix A. Zimmermann, the increased promotional budget for updating purposes and the increased number of catalogs circulated made a highly positive impact on the overall development of sales revenues. As Dr. Zimmermann points out: "In the case of the KAISER + KRAFT Europa and K + K America business units, however, this positive trend was unfortunately counterbalanced by a downturn in the manufacturing sector." Excluding the new acquisitions, the increase in sales performance amounted to roughly 5 percent.
Although the pro forma pre-tax result, with a rate of increase of 12 percent, did not quite match the growth in sales, Zimmermann was highly satisfied with the new figures: "In view of the slight downswing in the American and European economies, this increase from DM 41.3 (EURO 21.1 million) to DM 46.3 (EURO 23.7 million) is an outstanding result from our point of view." The main reason for the slightly lower rate was the fact that Conney Safety Products, acquired in October 1998, has - as expected - not yet been able to show positive results. And, finally, initial expenditure on preparation for the divestment has had its effect on the pro forma result. Additional costs in the amount of approximately DM 2.0 million (EURO 1.0 million) were incurred in the first half of 1999 as a result of new personnel intake at TAKKT AG, auditing fees for the half-yearly report, and preparatory measures for the share flotation which is planned for September 15, 1999. During the first six months of 1999, the EBITDA code, which represents the operational business of the TAKKT AG irrespective of taxes, types of funding, or investment activities, improved 24 percent from DM 48.0 (EURO 24.5 million) to DM 59.4 (EURO 30.4 million). For the second half of the year, TAKKT anticipates a continued upward trend in business development. Although the spin-off will not affect operational earning capacity in the future, interest payments resulting from it in the amount of some DM 5.7 million (EURO 2.9 million) for the second half of 1999 will have a negative effect. To this must be added the increased depreciation on corporate value amounting to roughly DM 7.1 million (EURO 3.6 million) for the second half of 1999, plus one-off expenses in connection with the imminent stoch exchange listing.
The stock exchange listing
Once the restructuring has been entered in the Register of Companies, GEHE shareholders will receive TAKKT AG shares on a 1:1 basis, additionally and with no capital expenditure, and will then able to deal freely with these from September 15, 1999 onward. As Georg Gayer, Chairman of the TAKKT Managing Board, emphasizes: "We take the term shareholder value literally!"
The main GEHE shareholder (51.6 percent), the Duisburg-based Franz Haniel & Cie. GmbH, will thus have the same share in the TAKKT AG. Ten percent of shares will be assigned to the Cologne-based insurance group AXA Colonia, while the remaining 38.4 percent will be in the hands of private and institutional investors.
Both the sales figures and the operating result bode well for the planned flotation in September. As Zimmermann points out: "It is becoming clear that we have established an excellent basis on which to develop and maintain the trust of our investors."
Stuttgart, September 6, 1999.
Tel.: ++49 (0) 711/5001-239
Dr. Felix A. Zimmermann
Tel.: ++49 (0) 711/5001-861