Higher earnings before tax in the first half of 2003

TAKKT AG improves profitability

In spite of the continuing difficult economic climate, TAKKT AG, the leading B2B mail order specialist for office, business and warehouse equipment in Europe and North America, improved its operating result in the first half of 2003. Turnover based on stable year-on-year exchange rates remained almost stable, declining by only 0.7 percent. While turnover reported in euros fell by 9.6 percent to EUR 360.8 (399.1) million due to the continued weakness of the US dollar, earnings before tax increased by 1.6 percent to EUR 19.2 million.

Georg Gayer, Chairman of TAKKT AG, does not expect a sustained turnaround in the second half of the year: “There is currently no marked recovery trend in Europe, and the economic recovery in the USA is weaker than expected.” Mr Gayer pointed out that the company had brought capacity into line with expected volumes. In spite of the unsatisfactory economic situation in Europe and the USA, TAKKT continues to target at least stable year-on-year earnings margins for the full year 2003.

Earnings margins improved
The group’s high and stable profitability continued to improve, with the gross profit margin increasing from 40.1 percent in the first half of the previous year to 40.5 percent in the first six months of 2003.

While EBITA fell by 7.7 percent to EUR 34.6 (37.5) million in the first half of 2003 due to parity changes, operating profitability increased, with the EBITA margin improving to 9.6 (9.4) percent. The EBIT margin was also up from 7.1 to 7.3 percent, while EBIT declined slightly from EUR 28.2 million to EUR 26.3 million.

At EUR 19.2 (18.9) million, the TAKKT Group’s earnings before tax were up 1.6 percent on the same period of the previous year. Due to lower amortisation in euro terms, the cash flow remained slightly below the previous year’s level, declining from EUR 25.9 million to EUR 25.3 million.

KAISER + KRAFT EUROPA improves its profitability in spite of turnover decline
At EUR 181.6 (183.9) million, KAISER + KRAFT EUROPA’s turnover remained below the figure reported for the first half of 2002. This was primarily attributable to the continued difficult economic situation in Germany. The new companies established in the past years such as KAISER + KRAFT Portugal, however, reported gratifying growth rates. KAISER + KRAFT EUROPA’s profitability improved slightly, with EBITA reaching EUR 27.7 (26.9) million.

Topdeq affected by difficult market environment
In the first half of 2003, the specialist for design-oriented office furniture and accessories reported a decline in turnover by 8.4 percent to EUR 35.8 (39.1) million. This was primarily attributable to the continued crisis in the office furniture market which directly affected the companies in Germany, the Netherlands and Switzerland. The French and US companies, in contrast, continued to increase their sales significantly. All in all, Topdeq’s EBITA came to EUR -1.5 (0.4) million, which was lower than had been expected.

K + K America improves turnover and profitability
The turnover of the four K + K America companies increased slightly from USD 158.0 million in the first half of 2002 to USD 158.3 million in the same period of 2003. Due to the weaker US dollar, turnover reported in euros, however, fell to EUR 143.4 (176.1) million. Hubert and Avenue as well as the newly established C&H Productos Industriales in Mexico developed favourably.

K + K America’s profitability increased, with the EBITA margin up from 7.9 percent in the first six months of the previous year to 8.4 percent in the first six months of this year.

Short profile of TAKKT AG
TAKKT AG is the leading European and North-American B2B mail order specialist for office, business and warehouse equipment. The group meanwhile sells its products in over 20 countries. The TAKKT share has been listed at the Frankfurt and Stuttgart stock exchanges since September 15, 1999 and was admitted to the Prime Standard segment of Deutsche Börse AG on January 1, 2003.

Figures of TAKKT AG at June 30, 2003

Stuttgart, July 31, 2003

Contacts:

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

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