Letter from the CEO

Felix A. Zimmermann

(Chairman of the Management Board, CEO)

In 2019, TAKKT was able to generate slightly higher sales than in the previous year. This increase was attributable to an acquisition in Europe as well as the stronger US dollar. Organic development, on the other hand, was slightly negative and characterized by a significant loss of momentum over the course of the year. We felt a marked economic downturn in Europe in particular. This could especially be seen in the German automotive sector, which is an important market for us. However, other countries such as Switzerland proved to be stable. In the US, the expected termination of business with a major Hubert customer had a negative impact on growth. The other US activities saw growth, but also lost pace over the course of the year. Organic sales development at TAKKT was minus 1.4 percent. Without the loss of the major Hubert customer, we would have been able to report slight growth despite the challenging conditions. 

Early in the year, we have begun disciplined cost management in view of the weakening economy. In addition, structural adjustments made in 2019 resulted in one-off costs of roughly ten million euros that had an adverse impact on earnings. However, at 12.4 percent, we achieved a slightly higher overall EBITDA margin than the forecast of around 12 percent that was adjusted in October.

In the last year, we took an in-depth look not only at our business development but also at how we want to position TAKKT in the future. Where do we see the greatest growth opportunities and where do we want to be active? How do we have to organize ourselves as a company and what do we have to do differently to ensure continuous success? In November, as a result of these deliberations and discussions, we decided together with the Supervisory Board on a new organizational structure and a change to the management structure. This will be called TAKKT 4.0. We had come to the conclusion that the previous long-established organizational structure with several, stand-alone business models managed in parallel in one portfolio was reaching its limits – especially during the transformation. Our dynamic market environment requires quick decision-making processes and a clearer focus in terms of strategic direction. 

With TAKKT 4.0, we are therefore concentrating on two business models for two different customer types. The Omnichannel activities will meet the needs of quality- and service-oriented corporate customers, and Web-focused providers cover the requirements of more price-conscious business customers. In addition, the organizational realignment includes a new allocation of responsibilities and functions at the relevant level in the Group. Functions that deal closely with the customer such as sales and marketing or putting together the product portfolio will continue to be carried out by the business units. Supporting functions such as IT services as well as purchasing and customer data analysis will increasingly be managed at the level of both segments. Establishing more integrated structures and functions will increase scalability within the two business models.  

Each segment will have higher operational independence and will be managed by a member of the TAKKT Management Board. Heiko Hegwein will assume responsibility for the Omnichannel Commerce segment and a fourth member of the Management Board will lead the Web-focused Commerce segment. We will start developing this segment immediately after the appointment of the new Board member. For the Omnichannel segment, on the other hand, the initial focus is to prepare the individual businesses for integration into the segment. The realignment of the Group will be carried out step by step and will probably take two to three years. We expect the realignment to result in a more customer-oriented structure, faster decision-making processes, a clearer and more distinct market positioning for the two business models and ultimately accelerated growth.  

The more integrated structures and functions in the two segments will also give us an advantage with regard to acquisitions. Our new organizational structure will allow newly acquired companies to be more closely integrated, resulting in greater potential to capitalize on positive synergy and scaling effects. Consequently, our M&A activities are and will remain a very important part of our growth strategy. We will be able to act whenever acquisition opportunities arise during the organizational realignment as well. In the past year, we took advantage of such an opportunity in May by acquiring XXLhoreca, a Dutch e-commerce provider of restaurant equipment, and integrated it into the Newport group. In addition to acquisition opportunities, we also conduct regular checks to ensure that all existing activities are still in line with TAKKT’s current strategic approach. We are currently examining strategic options at Hubert and Central as both units follow a somewhat different business model from the other Omnichannel Commerce activities.  

Strengthening operational excellence is another aspect of TAKKT 4.0. In this regard, new management methods and processes will be developed and introduced throughout the Group in order to promote best practice methods and implement continuous improvement processes. With TAKKT 4.0, we are building on our digital agenda, which we have been pursuing and implementing since 2017. We have made substantial progress since the start of the digital transformation and have, for example, significantly increased our e-commerce business. We will continue to make digitalization a high priority. The initiatives and measures will be merged into TAKKT 4.0 over the course of 2020 and continued in the new organizational structure.

TAKKT places long-term strategic importance on sustainability. We are convinced that sustainable action represents competitive advantages across all stages of the value chain and enhances company value for the long term. We serve as a role model for sustainability in our industry and our goal is to expand this further beyond 2020. This is also why we support the Sustainable Development Goals adopted by the United Nations and are committed to doing our part to achieve these internationally agreed objectives. This annual report is published together with the current TAKKT sustainability report, which provides information on all sustainability measures in the Group. 

The composition of the Supervisory and Management Boards changed in the past year. The previous Chairman of the Supervisory Board, Stephan Gemkow, resigned his seat at the end of the Shareholders’ Meeting on May 15, 2019. On behalf of the Management Board, I would like to express my great thanks to Mr. Gemkow for the positive and trusting collaboration over the past years. During his term, he has provided valuable input for the strategic development of our company. The Shareholders’ Meeting elected Thomas Schmidt as a new member of the TAKKT Supervisory Board. He has been CEO of Franz Haniel & Cie. GmbH since mid-2019. Florian Funck, who has been a member of the Supervisory Board since the end of 2011, was appointed as its new chairman. Dirk Lessing stepped down from the Management Board of TAKKT AG effective October 31. On behalf of myself and the Management Board, I want to take this opportunity to express our deepest appreciation to Dirk Lessing for his many years of outstanding commitment at TAKKT and wish him all the best for the future both professionally and personally.

Looking ahead at 2020, we expected until recently to see an upswing in business over the course of the year after a challenging first half. However, due to the rapid spread of the coronavirus, we now have a completely different situation and are facing some difficult weeks and months. Our top priority right now is to protect our employees from infection. In addition, we have initiated extensive measures to maintain operations. In order to tackle the tasks presented by the pandemic, we have set up crisis teams at the Group level and in the business units, in which the Management Board is also involved. 

Reliable forecasts about the development of the Group in the 2020 financial year cannot be made at this time. Based on the information currently available, we expect the pandemic to have a noticeable negative impact on the supply chains, our own operations and customer demand in the relevant markets in Europe and North America. Sales and EBITDA are therefore expected to be significantly below the level of 2019 in the current fiscal year. 

In view of the exceptional crisis situation and uncertainty due to the spread of the coronavirus, we, the Management Board, are giving the highest priority to financial stability and flexibility. Our aim is to be able to act at any time, even during the crisis. This includes carrying out restructuring measures and the further implementation of TAKKT 4.0. TAKKT also wants to be prepared for opportunities after the pandemic has subsided and once again be able to invest in growth. To achieve this, the Group is responding with cost reduction programs and an investment freeze. Furthermore, the Management Board and Supervisory Board propose to the Shareholders’ Meeting that the dividend payment be suspended for the 2019 fiscal year.

A very special thanks is due to our employees, whose commitment and strong dedication create the foundation for our success. We believe that a common understanding and mutual goals for the future orientation of TAKKT are vital for our success. I would also like to thank our customers, business partners and shareholders for the trust they have placed in us over the past year. Together with its employees and partners, TAKKT has also overcome difficult crises in the past. Even if it is difficult to find a historical comparison for the current situation, I believe that, as a company, we are well positioned to build on our past success once the pandemic has eased.

Felix Zimmermann

(Vorsitzender des Vorstands der TAKKT AG)

Web-focused Commerce

Read More

Omnichannel Commerce

Read More

Our Mission Statement

Read More

Our Core Behaviors

Read More