Overall development remains positive despite weak economy

TAKKT increases turnover by 17.5 percent at half-year mark

The Stuttgart-based TAKKT AG has continued its dynamic development during the first six months of 2001. The leading business-to-business mail order supplier for office, business and warehouse equipment in Europe and North America increased its turnover by 17.5 percent to EUR 428.7 (364.8) million as compared to the same period last year. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were up 9.9 percent to EUR 34.3 (31.2) million. The EBITDA margin decreased slightly from 8.6 to 8.0 percent. Figures for the first half of 2001 were impacted by the continued expansion of the group: The company had to absorb the start-up costs for the newly established subsidiaries Topdeq USA, KWESTO Poland and KAISER + KRAFT Portugal as well as expenses for a first-time catalogue mailing in Ireland. Nevertheless, TAKKT AG is satisfied with the first six months: "In view of our strong market position in Europe, we consider the overall development positive despite the weak economy in Europe and the United States," Georg Gayer, chairman of the management board of TAKKT AG, said.

Positive performance in Europe compensates for weaker US business
The takeover of US mail order supplier Hubert was the driving force for turnover growth during the first six months of 2001. Adjusted for the acquisition, group turnover increased by 3.9 percent to EUR 379.2 million. Adjusted for currency exchange rate effects, organic growth was 1.3 percent. In part, the very good development of KAISER + KRAFT EUROPA compensated for the weaker business development in the United States and at Topdeq.
Group earnings before interest and taxes (EBIT) for the first six months were EUR 19.4 (22.2) million, resulting in an EBIT margin of 4.5 percent. Earnings before taxes decreased to EUR 8.5 (17.7) million. "However, due to the first-time consolidation of Hubert and the following interests and taxes as well as start-up costs for newly established companies, these figures are not directly comparable to last year's figures," said Dr. Felix A. Zimmermann, board member for finance and controlling at TAKKT AG.

KAISER + KRAFT EUROPA remains strongest contributor to turnover
With a share in turnover of 47.1 percent, KAISER + KRAFT EUROPA once again proved to be the strongest division of the TAKKT group. The turnover of this division increased by 13.0 percent to EUR 202.1 (178.9) million. In Portugal, Ireland and Poland, KAISER + KRAFT EUROPA established new operating companies to tap more strongly into the local market potential. Overall, KAISER + KRAFT EUROPA succeeded in taking additional market shares away from wholesalers and retailers during the first two quarters of 2001. This trend will most likely continue due to the expansion of the mail order centre in Kamp-Lintfort, since this measure will facilitate improved delivery services.

Topdeq expands warehouse in Pfungstadt
The turnover of Topdeq decreased by 4 percent from EUR 41.6 million to EUR 40.0 million. As a result, the company's share in total turnover of the TAKKT group was 9.3 percent. However, it must be considered that the specialised supplier for office furniture with modern design had recorded extraordinary growth during the first half of 2000: Additional sales and marketing campaigns for the Topdeq's 10-year anniversary had driven turnover up 22.5 percent. During the first six months of 2001, there was no occasion for repeating these measures. Furthermore, the company faced a decreased demand from the New Economy and a more intense competition: Other suppliers are increasingly attempting to copy the Topdeq concept. While the US subsidiary established at the beginning of the year had a good start, the European companies did not quite meet the expectations. With the warehouse expansion in Pfungstadt, this division will lay a foundation for realising the continuously good growth prospects in Europe.

K + K America reduces exposure to the economy
During the first six months of the year, the business development of K + K America was slowed down by the weak economy in the United States. However, with the acquisition of Hubert the diversification strategy of this TAKKT company was beginning to pay off: The broad product range and the large customer base of the subsidiaries C&H Distributors, Avenue Industrial Supply, Conney Safety Products and Hubert reduced K + K America's exposure to the ups and downs of the economy. Among these, the business suppliers of specialities Hubert and Conney was less affected by cyclical developments than that of C&H Distributors, which focuses on business and warehouse equipment. Due to the first-time consolidation of Hubert, the turnover of K + K America was up 21.0 percent to USD 167.6 (138.6) million. This corresponds to a 43.6 percent share in overall turnover for the TAKKT group. Adjusted for the acquisition of Hubert, turnover in US dollars decreased by 11.1 percent.

Two-digit growth targeted
"Despite a broad diversification, the TAKKT group will not be able to completely detach from the general economic situation during the next few months," Gayer said. "Accordingly, we need to wait and see how the economy will further develop in Europe and the United States." For the entire financial year 2001, the TAKKT group expects an increase in turnover of more than 10 percent. Despite start-up costs for the newly established companies as well as the somewhat dragging business development mainly in the United States, an EBITDA-margin of at least 10.5 percent is expected due to the stable gross profit margin. Earnings before taxes, however, will remain well below last year's figure due to interests and goodwill depreciation for the acquisition of Hubert and also because of the weaker economic situation.

Stuttgart, 30 July 2001


Georg Gayer
Phone +49 (0)7 11.50 01-239

Dr. Felix A. Zimmermann
Phone +49 (0)7 11.50 01-861

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