TAKKT records increased earnings figures in a difficult economic environment

New nine-month record for cash flow

TAKKT AG has successfully bucked the overall downward economic trend and has continued to grow organically. In the first nine months of 2008 the Group achieved a turnover of EUR 703.2 (2007: 736.9) million. Adjusted for currency effects and the sale of Conney Safety Products LLC (Conney) the Group’s turnover grew organically by 5.0 percent. The earnings figures continued to develop disproportionately. For cash flow the Group achieved a new nine-month record.

“The fact that we have maintained our organic growth in the third quarter, against the background of the worldwide economic downturn, is due to the broad diversification of our portfolio,” said Georg Gayer, CEO of TAKKT AG. “However, if the overall economic downturn continues, it is possible that for the whole year 2008 we will only achieve an organic turnover growth of some two percent. We would thus undershoot our previously declared goal of four percent.”

Profitability again increased
Despite negative trends in the economy, earnings before interest, tax, depreciation and amortisation (EBITDA) rose in the first nine months of the year by 2.1 percent to EUR 103.4 (101.3) million. The EBITDA margin thus reached a figure of 14.7 (13.7) percent.

“The development of earnings shows once more the strength of the TAKKT business model,” said Dr Florian Funck, CFO of TAKKT AG. “Thanks to the higher gross profit margin and higher capacity utilisation of the mail order infrastructure in Europe, we again increased the EBITDA margin. For 2008 we anticipate an EBITDA margin above the previous year’s figure of 14.4 percent. Based on the current economic trend, however, it is unlikely that the upper end of our target corridor of 12 to 15 percent will be reached.”

Gratifying growth at KAISER + KRAFT EUROPA
In a situation of noticeably decreasing economic dynamism, the division continued to play its role as TAKKT Group’s strongest driver of growth in the third quarter. KAISER + KRAFT EUROPA increased its turnover to EUR 408.1 (374.7) million. This represents a growth of 8.9 percent in comparison to the previous year’s figure. This positive development was largely due to the increased number of orders. Progress in Eastern Europe, Portugal, Finland, Switzerland and Austria as well as in Belgium and Italy was especially gratifying.

EBITDA rose by 10.8 percent to EUR 83.1 (75.0) million, so that the EBITDA margin reached a figure of 20.4 (20.0) percent. This increase was due in particular to higher capacity utilisation.

Lower turnover for Topdeq
At Topdeq a fall in the number of orders in the first nine months of this year led to a decline in turnover of 5.3 percent to EUR 62.6 (66.1) million. In currency-adjusted terms, turnover fell by 3.8 percent. However, the companies in Belgium and Austria bucked the trend and achieved double-digit growth.

Despite lower turnover figures and higher rental expenditure for the expanded warehouse infrastructure in the USA, the division was able to increase its profitability. EBITDA rose from EUR 3.8 to 4.7 million – an increase of 23.7 percent. The margin reached 7.5 (5.7) percent. The reasons for this are improved processes as well as the combined use of the expanded mail order centre in Pfungstadt by KAISER + KRAFT EUROPA and Topdeq.

K + K America defies difficult market environment
Thanks to its broad diversification, the division again performed well in the North American market in the third quarter. The decline of 21.4 percent in turnover to EUR 233.1 (296.4) million is entirely due to the sale of Conney and the weakness of the US dollar. Adjusted for these effects, K + K America grew organically on a US dollar basis by 2.1 percent from USD 347.0 to 354.3 million in the period under review.

The EBITDA of the division fell by 20.6 percent to EUR 23.1 (29.1) million due to currency and divestment effects. However, the margin improved to 9.9 (9.8) percent. The principal reasons were improved trade margins. Adjusted for Conney the margin increase would have been slightly higher.

Telephone conference
We invite you to put your questions to our Management Board personally. For this purpose we are arranging a telephone conference on 30 October 2008 at 15:00 hrs (CET) in which we will respond to your questions. Please dial in on the telephone number +49 30 20 22 31 91.

Figures of TAKKT AG under IFRS at the end of Q3 2008

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Short profile of TAKKT AG
TAKKT is the leading B2B mail order company 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 over 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.

The TAKKT Group employs some 2,000 staff, has about 3 million customers worldwide and distributes more than 70 million catalogues and mailings per year. 

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

Stuttgart, 30 October 2008

Contact:

Georg Gayer, CEO
Phone +49 711 34658-201

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

E-mail: investor@takkt.de

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