TAKKT continues dynamic growth

Further substantial improvement in key figures – healthy growth also predicted for 2007

“In 2006, the TAKKT Group continued its successful development and profitable growth,” explained CEO Georg Gayer at the Group’s annual financial statements press conference. The leading B2B mail order company for office, business and warehouse equipment in Europe and North America increased its turnover substantially by 24.0 percent to EUR 958.5 million. Currency-adjusted the increase in turnover was 24.4 percent. All three divisions contributed to this result.

“This means that we have again exceeded our turnover forecast – which was increased twice in 2006 – and recorded significantly higher growth than the economies in the markets in which we operate,” stressed Gayer. This is due in part to the acquisition of the National Business Furniture (NBF) Group at the beginning of 2006. Adjusted for exchange rate effects and for the effects of the acquisition of the US market leader for office equipment mail order, TAKKT increased its turnover by 10.1 percent.

However, this strong growth was not achieved at the expense of profitability – at just under EUR 120 million, EBITDA reached a record level. Once again, the margin of 12.5 percent was above the long-term target corridor of between 10 and 12 percent. Without the NBF acquisition, this would have been as high as 13.2 percent. After exceeding the EBITDA margin target levels for two consecutive years, TAKKT has resolved to raise the corridor by one percentage point, now setting it at between 11 and 13 percent.

“The good figures are attributable to optimised products and services, as well as to improved purchasing terms and capacity utilisation. They are a firm indication of the TAKKT business model’s potential for growth and profitability and of the opportunities that exist in the B2B mail order business,” said Dr Florian Funck, CFO of TAKKT AG. Profit for the period also increased: a rise of 24.0 percent to EUR 62.5 million.

High profitability continues for KAISER + KRAFT EUROPA
The largest division in the TAKKT Group increased its turnover by 12.5 percent to EUR 451.2 (401.3) million in 2006, with almost all subsidiaries contributing to this result. The performance of Group companies in Scandinavia, Southern and Eastern Europe, Benelux, Switzerland and Germany was particularly encouraging.

In spite of set-up expenses for the numerous new and young companies established over the last two years, the profitability of KAISER + KRAFT EUROPA continued to improve. While EBITDA grew by 20.6 percent to EUR 84.9 million, the margin increased by 1.3 percentage points to 18.8 percent.

Topdeq: repositioning shows results
Growth at Topdeq division is also continuing. In the year under review, turnover for the division increased from EUR 82.1 to 86.0 million. Adjusted for currency effects, this corresponds to an increase of 4.9 percent, which is primarily due to the repositioning of Topdeq as a premium brand.

Overall, the profitability of the division increased disproportionately, with the EBITDA margin rising from 3.4 percent in 2005 to 5.0 percent in the year under review. This was due to increased product and service quality, better purchasing margins and improved capacity utilisation.

K + K America: positive increase – also due to NBF acquisition
The K + K America division also recorded substantial increases in growth, with turnover rising on US dollar basis by approximately 47 percent to USD 528.8 (360.2) million in 2006. Translated into the reporting currency of euro this amounted to EUR 421.5 (290.0) million. This is partially attributable to the acquisition of NBF. However, even without NBF, K + K America grew by an encouraging 8.6 percent on a US dollar basis. In addition to the US company Hubert, particularly good development was also recorded for the NBF Group, where integration is progressing according to schedule.

The EBITDA of K + K America increased by just under 20 percent to EUR 39.3 million. However, the EBITDA margin fell from 11.3 to 9.3 percent, in line with expectations. One of the main reasons for this is the acquisition of NBF, which still records margins which are lower than the Group average.

Expansion continues
In addition to record levels of turnover and profit, 2006 was also a year of increasing internationalisation for TAKKT. While KAISER + KRAFT EUROPA subsidiary Gaerner launched its business in France, the first KAISER + KRAFT catalogues were dispatched in China. Topdeq also entered the Austrian market at the beginning of September. Further-more, TAKKT expanded its business through the acquisition of the NBF Group.

Dividend increase announced
Owing to the high level of profit generated during the period, TAKKT’s equity once again rose. In spite of the NBF acquisition, the equity ratio excluding minority interests improved from 46.1 to 47.7 percent. Dividends will also rise as a result of these excellent figures. At the next Annual General Meeting, the Management and Supervisory Boards will be proposing an increase in the dividend of approximately 67 percent to 25 cent per share. From the Management Board’s perspective, this will allow shareholders to participate in TAKKT’s success, while also ensuring that a solid basis for growth remains.

The Management Board is cautiously optimistic for 2007. Cautious because the business development of the Group is affected by the economy; however optimistic because TAKKT will continue to fully exploit the potential of the B2B mail order business. This will be achieved by an expanded, updated product range and improved services in existing markets. Furthermore, TAKKT will continue to expand into new regions. “Our aim for 2007 is to grow organically and in currency-adjusted terms by at least four percent. Profitability is likely to be in the upper half of the new target corridor of between 11 and 13 percent,” predicted Gayer.

The figures for the first quarter of 2007 will be published on 26 April. The Annual General Meeting will be held in Forum Ludwigsburg on 4 May.

IFRS figures of TAKKT Group

Short profile of TAKKT AG
Represented in more than 25 countries, TAKKT AG is the number one B2B mail order company for office, business and warehouse equipment throughout Europe and North America. The product range of the TAKKT subsidiaries comprises some 120,000 items from the areas business and warehouse equipment, classical and design-oriented office furniture, occupational safety products, sales promotion items for retailers, the food service industry and the hotel market.

TAKKT AG employs over 2,000 staff, has around 3 million customers worldwide and distributes more than 70 million catalogues and mailings per year.

The company is listed on the SDAX and was admitted to Deutsche Boerse’s Prime Standard on 1 January 2003.

Stuttgart, 22 March 2007

Contact:

Georg Gayer, CEO
Phone +49 711 34658-201

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

E-mail: investor@takkt.de