Annual General Meeting agrees on constant dividend of 10 cents and approves stock repurchase program

TAKKT AG able to further increase its profitability

Despite the continued weakness of the economy, the TAKKT Group was able to reach all objectives set at last year’s General Meeting in financial year 2002. TAKKT AG even improved its profitability. The Annual General Meeting approved the proposal of the Management and Supervisory Boards to pay out an unchanged dividend of 10 cents per share. The shareholders also approved a stock repurchase program enabling the company to repurchase a maximum of 10 percent of its shares. Georg Gayer, Chairman of TAKKT AG’s Management Board, announced that TAKKT will continue its expansion strategy, adding that a new KWESTO company in Hungary will be founded enable the Group to benefit from EU eastern enlargement.

Market leadership expanded in weak economic environment
In financial year 2002, TAKKT AG was able to expand its market position as the leading business-to-business mail order company for plant, office and warehouse equipment in Europe and North America despite the weak economic environment. This was achieved not least thanks to the company’s consistent product portfolio strategy. The company also increased its profitability. “In view of the difficult economic situation, we are satisfied with our overall business performance. The company will return to the previous growth rates in the medium and long term,” Group Chairman Georg Gayer said with a view to the future.

Equity and cash flow strengthened
The TAKKT Group used the consolidated net profit after minority interests of EUR 23.8 (18.7) million to strengthen the capital base supporting its future growth. The Group increased its equity to EUR 149.6 (148.4) million, raising the equity ratio from 24.8 to 27.7 percent. Total assets declined by 9.9 percent to roughly EUR 540 million. Cash flow was up 9.6 percent on the previous year’s EUR 48.3 million to EUR 53.0 million. “TAKKT continues to display above-average profitability even in difficult economic times,” said Chairman Georg Gayer. Free cash flow rose by approx. 80 percent to EUR 44.4 million.

Dividend unchanged at 10 cents per share
The shareholders approved the proposal of the Management and Supervisory Boards to pay out a dividend of 10 cents per share (i.e. a total of EUR 7.3 million) from TAKKT’s reported profit. The remaining amount will be allocated to TAKKT AG’s revenue reserves.

Stock repurchase program approved
The Annual General Meeting also authorized an 18-month stock repurchase program for the repurchase of a maximum of 10 percent of the company’s shares. A convertible bond issued by the AXA Group for conversion into GEHE and TAKKT shares will become due in November this year. As the conversion may lead to increased selling pressure, which may impact the price of the TAKKT share even though this may not be justified by the fundamentals, the Management Board intends to use this authorization to take a pro-active approach to the conversion process. The company’s primary objective will be to increase the free float, though. According to Georg Gayer, chairman of the Management Board will take action only if the capital market is unable to absorb these shares which would then be used as acquisition currency.

Earnings before taxes up in Q1 2003
Despite the persisting weak economic environment in Europe and the USA, TAKKT AG delivered a positive performance in the first quarter of 2003. Adjusted for currency conversion effects, turnover was up 1.4 percent. Due to the weakness of the dollar, however, turnover reported in euros declined by 7.2 percent to EUR 191.2 (206.0) million. The Group’s EBITDA margin climbed from 11.5 to 12.3 percent. EBIT rose to EUR 16.8 (16.3) million, while the EBIT margin increased to 8.8 (7.9) percent. Earnings before taxes climbed just under 14 percent to ERU 13.1 (11.5) million.

Stable profitability expected for 2003
In view of the economic situation and the imponderables resulting from the dollar/euro exchange rate, the Management Board did not present a detailed forecast for financial year 2003. “Our motto has always been to put “quality before quantity”, which is why we now consider zero growth - defined as organic growth adjusted for currency conversion effects - a realistic target,” said Board Chairman Georg Gayer. “We nevertheless remain confident that we will be able to achieve an EBITDA margin of between 9 and 11 percent in 2003.” Profitability may be enhanced further in the current year.

Management and Supervisory Boards endorsed
The Annual General Meeting endorsed the action taken by the Management and Supervisory Boards during the financial year and approved the proposals made by the Management and Supervisory Boards with regard to the other items on the agenda.
 
Brief profile of TAKKT AG
TAKKT AG is the European and North American market leader in the B-to-B mail order business for office, plant and warehouse equipment. The Group sells its products in over 20 countries in Europe, America and Japan (since January 2003). TAKKT AG has been listed on the Frankfurt and Stuttgart stock exchanges since September 15, 1999. The TAKKT share was admitted to Deutsche Börse’s new Prime Standard with effect from January 1, 2003.

Stuttgart, May 6, 2003

Contacts:

Georg Gayer
Tel. 07 11.3 46 58-201
Dr. Felix A. Zimmermann
Tel. 07 11.3 46 58-207