TAKKT again exceeds its turnover and earnings targets in 2007

High level of profitability further increased

Despite uneven economic conditions in TAKKT’s key regions, Europe and North America, the Group was again able to improve its financial performance figures. On the basis of preliminary figures, turnover rose in 2007 by 2.9 percent in comparison to the previous year to EUR 986.2 (previous year: 958.5) million and thus reached a record level. Adjusted for currency fluctuations as well as for the turnover of US subsidiary Conney Safety Products LLC (Conney), which was sold on 30 September 2007, the increase in Group turnover would be 9.2 percent. “The positive development of TAKKT in 2007 again confirms the success of our strategy of international diversification,” says Georg Gayer, CEO of TAKKT AG.

The successful development of the business is also shown in earnings before interest, tax, depreciation and amortisation (EBITDA). This rose by 19.1 percent to EUR 142.3 (119.5) million. The margin also improved from 12.5 to 14.4 percent. It was thus above the target corridor for operative profitability, which TAKKT had raised only last year by one percentage point to 11 to 13 percent. Profit before tax rose disproportionately by 25.0 percent to EUR 116.1 (92.9) million also due to substantial debt repayments by the Group. The earnings margin reached a double-digit value at 11.8 (9.7) percent. “The positive trend in profitability was achieved through higher gross profit margins in all three divisions as well as the improved capacity utilisation of our mail order infrastructures in Europe,” says Dr Florian Funck, CFO of TAKKT AG. “Against the background of further optimisations, which have already been introduced, it can be assumed that TAKKT’s profitability figures will also continue to improve.” Cash flow reached a three-digit value for the first time at EUR 101.2 (81.7) million. This represents an increase of 23.9 percent and a margin of 10.3 (8.5) percent of Group turnover.

Concentration on core business
In pursuit of its strategy of concentrating on B2B mail order business in durable and less price-sensitive equipment, TAKKT sold its US subsidiary Conney on 30 September 2007. This company mainly sells consumables in the field of occupational safety and first aid. In addition the K + K America subsidiary National Business Furniture (NBF) has eliminated private persons from its customer portfolio, as these customers generally show significantly higher levels of returns and payment defaults. “NBF was able to more than compensate for the resulting losses in turnover by disproportionately high growth with existing business customers. Thus, in its second year of Group membership, NBF once again delivered profitable growth,” says Gayer.

TAKKT divisions in brief
The principal contributors to the overall very pleasing development in 2007 were the KAISER + KRAFT EUROPA and Topdeq divisions. The largest division, KAISER + KRAFT EUROPA, was again able to increase its business significantly in the fourth quarter. Its turnover in the year under review rose by 15.2 percent to EUR 519.7 (451.2) million. The EBITDA margin grew further from 18.8 to 20.9 percent.

Topdeq, despite weak business development in the fourth quarter, achieved an increase in turnover for the whole year 2007 of 6.3 percent to EUR 91.2 (85.8) million. Adjusted for the effect of exchange rate fluctuations this represents an increase of 8.5 percent. The EBITDA margin improved further to 7.6 (5.0) percent.

The turnover of K + K America declined on account of the Conney sale from USD 528.8 to 512.6 million – a minus of 3.1 percent. Excluding Conney however, turnover on a US dollar basis rose by 2.0 percent. Turnover translated into the reporting currency amounted to EUR 375.3 (421.5) million. At 9.6 (9.3) percent the EBITDA margin was slightly above last year’s figure. The EBITDA of EUR 36.1 million includes a profit of approximately EUR 1 million from the sale of Conney.

Financial statements press conference
Further details of the annual financial statements and the outlook for 2008 will be published at the financial statements press conference in Stuttgart on 20 March 2008.

Conference call
We would like to invite you to put questions personally to our Management Board. A telephone conference is arranged for 14 February 2008 at 3:00 pm (CET) in which we will be delighted to answer your questions. Please dial in on +49 30 20 22 31 91.

Short profile of TAKKT AG
TAKKT AG is the leading B2B mail order group for office, business and warehouse equipment in Europe and North America. The Group is represented with its brands in more than 25 countries. The product range of the TAKKT subsidiaries comprises more than 130,000 items from the areas business and warehouse equipment, classical and design-oriented office furniture and accessories, as well as sales promotion items for retailers, the food service industry and the hotel market.

TAKKT AG employs more than 2,000 staff, has about 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.

Preliminary IFRS figures of the TAKKT Group at the end of Q4 2007

Stuttgart, 14 February 2008

Contact:

Georg Gayer, CEO
Phone +49 711 34658-201

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

E-mail: investor@takkt.de