Economic upturn, acquisition and new catalogue push TAKKT’s turnover up by 30 percent

Earnings up considerably in all divisions – positive forecast for 2006 

TAKKT AG was able to increase its first quarter turnover by 30 percent against the previous year to reach EUR 247.6 (190.5) million. At the same time already high operating profitability was improved even further. All three Group divisions recorded higher turnover and earnings figures. The B2B mail order company for business equipment is expecting record turnover and earnings figures for the full year 2006.  

TAKKT grew organically in the first quarter and as a result of the NBF Group takeover at the beginning of the year. Adjusted for acquisition and currency effects the Group’s turnover increased by 12.2 percent. “This increase in turnover was also driven by economic recovery in Germany and Europe. TAKKT continued to optimise its product range, further improved its service levels and revised its catalogues”, Georg Gayer, Chairman of the TAKKT AG Management Board, commenting on business development. TAKKT also benefited from the fact that Easter public holidays were in April there were more working days than in the previous year’s quarter.  

All value and growth drivers developed positively for TAKKT in the first three months of the year. Average order values and the number of orders were up while new customers were added to the customer base.

Quarterly figures are fully in line with expectations 
As a result of the first-time consolidation of NBF Group, the gross profit margin fell slightly to 41.1 (41.6) percent. Earnings before interest, tax, depreciation and amortisation, EBITDA, rose by EUR 8.5 million to EUR 34.6 million, which is an increase of 32.6 percent. The EBITDA margin improved from 13.7 to 14.0 percent. TAKKT Group would have achieved a margin of 15.0 percent without the consolidation of NBF.  

Profit before tax increased significantly to EUR 28.0 (21.4) million, up 30.8 percent in year-on-year terms. “This positive development can be mainly attributed to generally higher capacity utilisation of central mail order infrastructures in conjunction with improved efficiency of catalogues and mailings”, CFO Florian Funck explains the earnings figures. Cash flow reached EUR 22.8 million in the first quarter, exceeding the previous year's figure of EUR 17.4 million by far.  

“This positive business development makes us confident that the EBITDA margin 2006 is going to be at the top end of the long-term target corridor of ten to twelve percent”, notes Funck. This forecast considers higher expenses for newly founded and young companies compared to the previous year as well as the effect from the first-time consolidation of NBF Group.  

KAISER + KRAFT EUROPA continues to expand 
Continuing economic recovery in Europe and the new KAISER + KRAFT catalogue concept have had a positive effect on the business of KAISER + KRAFT EUROPA. Turnover rose by 15.4 percent to EUR 116.3 (100.8) million. Almost all country companies recorded double-digit growth.   

The earnings situation continues to be extremely good. Despite planned start-up expenses for young companies EBITDA was up from EUR 18.6 to 24.0 million, an increase of 29.0 percent. The EBITDA margin reached record-breaking 20.6 (18.5) percent.   

Business at the new company in China has been extremely promising since starting in February. Order intake has exceeded expectations significantly. Companies in Turkey and Romania are continuing to develop in line with expectations. Gaerner is entering the French market in May 2006 as planned.    

Topdeq remains on success track 
Topdeq Group continued its growth in the first quarter of 2006. The division increased its turnover by 10.4 percent to EUR 23.3 (21.1) million. In currency-adjusted terms the increase in turnover amounts to 8.5 percent. All companies contributed to this development with the exception of the German company. Business in the USA was especially positive.  

Topdeq increased its capacity utilisation and improved its product range, which resulted in an above average increase in the division’s profitability. EBITDA was up by 14.3 percent to EUR 1.6 (1.4) million, which is a margin of 6.9 (6.6) percent.  

The company started in Belgium in 2005 continues to develop very well. Preparations for entering the Austrian market are going according to plan.

K + K America benefits from NBF acquisition 
The K + K America division saw substantial growth in the first quarter of 2006. Compared to the previous year’s quarter, turnover was up by 44.4 percent to USD 129.8 (89.9) million. Translated into the reporting currency of euros the division generated EUR 108.0 (68.6) million, which corresponds to an increase of 57.4 percent.   

Consolidating NBF Group, which has been part of K + K America since 2 January 2006, is a key reason for this surge in turnover. However, excluding this acquisition turnover in the division was up by a positive 9.2 percent to USD 98.2 (89.9) million.  

The development of Hubert in the USA, C&H in Mexico and NBF Group is particularly positive. Despite the economic growth cooling down in the manufacturing sector the other companies recorded sound increases.  

The inclusion of the NBF Group also had a positive effect on the profitability of K + K America. EBITDA improved significantly from EUR 8.0 to 11.3 million, even if the EBITDA margin slipped from 11.7 to 10.5 percent, as expected. Excluding NBF the EBITDA margin was up to 12.1 percent.   

“TAKKT is positioned excellently in strategic and operative terms”, states Georg Gayer. “We are therefore confident that TAKKT will see an increase in turnover of at least 18 percent in the full year 2006. Business development in the first quarter impressively supports this ambitious target.”

TAKKT AG IFRS figures at the end of QI 2006

Conference call
We would like to invite you to personally put questions to our Management Board. A telephone conference is organised for 4 May 2006 at 3pm (CEST) in which we will be delighted to answer your questions. Please dial in on +49 30 20223191.

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 following areas: business and warehouse equipment, traditional and design-oriented office furniture and accessories, occupational safety products, 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 2 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, 4 May 2006

Contacts:

Georg Gayer, CEO
Phone +49 711 34658-201

Dr Florian Funck, CFO
Phone +49 711 34658-207