Maria, you have been CEO of TAKKT since the beginning of August. How do you see the company – what strengths and challenges have you identified?
I am really excited about the potential that our company has. We are a B2B distributor with a fast-growing share of e-commerce. We have long-standing customer relationships and score high on customer satisfaction. We are also very diversified, both regionally in Europe and North America and in terms of our customers, serving a vast range of businesses from hotels, restaurants and caterers to manufacturing companies and public-sector service providers. This is unique and offers enormous potential for growth. We address a market with a volume of around EUR 100 billion that is hardly consolidated. This presents a huge opportunity for TAKKT.
The second huge opportunity, but also the biggest challenge for us, is change – in other words, the rapid process of transformation in the market and internally within our company. We are seeing drastic changes in our customers’ working environments – moving away from conventional office to hybrid office environments, from conventional restaurants to take-away & self-service trends, from packaging designed to protect products to sustainable and environmentally friendly packaging solutions that are used as advertising media. This requires us to come up with innovative new products and services – and to enter into new partnerships with suppliers across the globe.
That makes it sound like TAKKT has a whole range of opportunities open to it going forward. Does TAKKT have a vision?
We bring WOW to our customers. WOW stands for Worlds of Work. We help our customers to design new working environments for their employees and customers. That’s where our passion lies. This is an area in which we have identified huge demand due to the rapid transformation in working worlds fueled by developments such as the shortage of skilled labor, digitalization and New Work, which have picked up even more speed due to the impact of the pandemic.
What are the three most important factors for TAKKT’s success in the future?
Growth, customer centricity and greater corporate integration.
That sounds very clear. What strategy do you plan to use to achieve your goals and lead the company into the future?
We are focusing on B2B customers in Europe and North America in three specific customer segments: manufacturing/logistics, HoReCa (hotels, restaurants, catering) and service companies. These are the three markets we aim to grow in. In order to achieve this, we have revamped our structure to create three divisions. As we seek to increase our high level of customer satisfaction even further, we are focusing on expanding our e-commerce activities and using OneTAKKT to improve key processes within the Group. OneTAKKT is our program aimed at accelerating our transformation into an integrated company. The aim is to bundle support functions such as logistics, technology, data, finance and HR at Group level. This allows for greater scaling and the exploitation of additional synergy potential and makes it easier to establish real competence clusters, for example for data & analytics or logistics processes. At the same time, the revamped setup allows our new divisions to focus fully on interaction with their customers.
Customer contact is also very important to you personally and you always take time for customer meetings. What message do you give your customers – what can they look forward to at TAKKT in the future?
Direct customer feedback is important in order to improve. Dialogue gives us a better understanding of the challenges facing our customers. We are constantly working to expand our product range to meet the needs of the new working worlds and to include innovative solutions that respond to key trends, such as collaborative working, in our portfolio. Sustainability is another very important issue. We certify our products as "enkelfähig", using criteria that determine whether they add value for the generations to come. And we are always on the lookout for new, more sustainable materials and are also working on even more sustainable supply chains, be it by cutting emissions or by ensuring further supplier certification. Our new divisional structure will also benefit our customers in that they will receive more products from a single source. This allows our customers to process everything in one order. For example, a warehouse buyer can place just one order to cover everything from pallet lifting trucks to wet vacuums and padded shipping cartons.
Those are ambitious plans. How do you plan to implement them and what sort of results do you expect?
We started the new year at full speed. The newly established Executive Team started work on January 01, 2022, and is now working on the systematic implementation of our strategy. There are areas where I already see initial success, for example in a project for the joint use of warehouse capacities in the USA and with the sourcing of container capacities for shipping to the UK. I expect the new structure to translate into continuous improvements over the coming months, allowing us to shift our growth rate up another gear. It is likely to take three years to implement our strategy in full. We expect the transformation process to allow us to increase our organic growth rate to a long-term average of ten percent. This marks a significant improvement over the pre-pandemic years.
"We expect the transformation process to allow us to increase our organic growth rate to a long-term average of ten percent."
How will the transformation process be reflected in earnings?
While our clear focus is on growth, it is important that we do not lose sight of our earnings and cash flow strength. This means that our additional growth will be associated with an improvement in profitability and a sustainable increase in EBITDA and cash flow. We want to maintain our reliable dividend payments. For the past fiscal year, we are proposing a dividend payment of EUR 1.10 per share. Besides our financial goals, customer satisfaction is, of course, an important anchor. As I mentioned earlier, achieving continuous improvements in customer satisfaction is a top priority for me personally. And satisfied employees are the lever for ensuring satisfied customers. This means that the corresponding key figures, which we measure at regular intervals, are an important indicator of the success of our transformation process.
"We [...] were able to achieve an organic sales increase of more than eleven percent, the strongest organic growth achieved in the company’s history."
Before we look further ahead into the future and talk about the expectations for this year, it is also worth looking back on 2021. As in the previous year, business development was once again impacted by the pandemic. What exactly were the implications?
The last fiscal year had surprises in store for us in several respects. On the one hand, the economic recovery in our target markets progressed at a faster rate than expected at the start of the year. On the other, unexpected new challenges emerged due to the ongoing supply bottlenecks and inflation. We responded well to these conditions and were able to achieve an organic sales increase of more than eleven percent, the strongest organic growth achieved in the company’s history. So it was a successful fiscal year for us. This is particularly evident if we look at our order intake, which was already up slightly on the 2019 level and would have allowed for even stronger sales growth. The difficulties regarding product availability and transportation that I mentioned earlier delayed deliveries to our customers, increasing our order backlog considerably. Without the delivery problems, our growth would have been significantly higher. We increased our EBITDA considerably to EUR 113 million. Once again, had it not been for the restrictions on product availability, we could have achieved significantly higher earnings.
When do you expect the delivery issues to ease? And what are your expectations for this year as a whole, also with regard to the order backlog and increased inflation?
Also due to the conflict in Ukraine and its potential impact, we do not expect the supply situation to quickly improve, though we hope for gradual improvement during the course of the year. And we have not seen any noticeable increase in cancellations of existing orders. This means that our competitors are being hit at least just as hard by the difficulties. Thanks to our established supplier contacts and efficient warehouse and logistics infrastructure, we are confident that the realization of the existing order backlog will help us achieve growth this year. We also aim to pass the increased prices on to our customers in full so as to keep our gross profit margin stable at over 40 percent. We expect organic growth in the high single-digit percentage range for the year as a whole. Moreover, we are driving forward the transformation by means of more strongly integrated positioning and development of the Group functions, which will affect earnings in 2022. Overall, the EBITDA is expected to increase at a similar rate to sales, to between EUR 110 and 130 million.
I would like to conclude with a personal question: What are you looking forward to
most over the next few months, Maria?
I look forward to many things. But there are also extremely worrying developments. I am very concerned about the conflict in Ukraine. TAKKT, and I personally, stand in solidarity with the people in Ukraine. We are supporting the country by means of donations and offers such as additional paid vacation for employees who provide assistance. In addition, we have decided to end our business relationships in and with Russia. We all hope that peace will soon be restored. That is the most important thing. As I look to the coming weeks and months in the company, I am excited to work to create new work environments for our customers. And of course, I also look forward to the Shareholders’ Meeting and the dialogue with our shareholders, especially regarding our growth strategy. I’d like to finish by saying a big thank you to our employees. Thank you for your tireless effort, your enormous commitment to our customers and the considerable impetus you have provided for the process of improvement. I am very proud to be part of this team.
