TAKKT registers economic upturn and welcomes the placement of 20 percent of the shares by the majority shareholder

TAKKT AG / Key word(s): Half Year Results

30.07.2013 / 07:30

P R E S S  R E L E A S E

TAKKT registers economic upturn and welcomes the placement of 20 percent of the shares by the majority shareholder

  • Consolidated turnover up by 5.9 percent in the first half-year; organic turnover 
    down by 5.8 percent
  • Positive turnover trend in the second quarter (organic: minus 2.1 percent following minus 9.5 percent in the first quarter)
  • Gross profit margin climbs to 44.0 (first half-year 2012: 42.9) percent
  • EBITDA margin amounts to 14.3 (15.7) percent
  • Earnings per share at EUR 0.48 (0.58)
  • Number of TAKKT shares in free float up by 68 percent due to the successful 
    placement of 20 percent of TAKKT shares by the majority shareholder Haniel

Stuttgart, Germany, 30 July 2013. The first half-year of the financial year 2013 continued to be affected by the ongoing challenging economic situation within the Eurozone. The willingness of many companies to invest was negatively impacted by widespread cuts in public spending in numerous countries. This had a noticeable influence on the performance of the TAKKT Group. Despite these factors, TAKKT's business performance improved significantly in the second quarter compared to the first three months of the year. The first quarter's decline in organic turnover (minus 9.5 percent) could be significantly reduced with minus 2.1 percent in the second quarter.

TAKKT was able to increase consolidated turnover by 5.9 percent to EUR 469.5 (443.5) million, thanks to the acquisitions carried out in 2012. Adjusted for acquisition and currency effects, turnover fell by 5.8 percent compared to the previous year's period. In addition to factoring out Ratioform's contribution, GPA's performance in the first quarter was also excluded as it has only been part of the TAKKT Group since 01 April 2012.
Claude Tomaszewski, CFO of TAKKT AG, comments the development: 'As the financial year 2012 drew to a close, it became clear that Europe's economic problems would not be resolved within six months. However, the second quarter performance was a great improvement over the first quarter. This is a positive trend, and one we anticipated.' The excellent margins at Ratioform and GPA gave the gross profit margin a considerable boost over the previous year, from 42.9 percent to 44.0 percent. When adjusted for changes since the previous year, the margin was 42.8 percent. Despite an improved gross profit margin, TAKKT's operating profitability fell as expected when compared to the previous year's period. Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 67.3 (69.7) million. The EBITDA margin declined from 15.7 percent in the first half-year 2012 to 14.3 percent in the period under review. Adjusted for acquisition effects, the EBITDA margin was 13.3 percent. The decrease in the margin was partially due to the catalogue being sent out at a different time. This led to increased shipping costs in the period under review. Another reason was that GPA clearly exceeded turnover and earnings expectations in the period under review. This positive performance led to an increase in the variable purchase price liability for GPA amounting to EUR 1.3 million. This extraordinary effect had a negative impact on the TAKKT Group's operating result in the first half-year.

The scheduled depreciation of intangible assets that were revealed as part of the acquisition of Ratioform and GPA led to a higher level of depreciation than in the previous year. Overall, this item came to EUR 13.3 (8.5) million. Debt and corresponding interest payments also increased as a result of the acquisitions. Finance expenses totalled EUR 6.5 (3.6) million in the first half-year 2013. Earnings per share reached EUR 0.48 (0.58).

TAKKT's cash flow - defined as profit plus depreciation, impairment of non-current assets and deferred tax affecting profit - amounted to EUR 47.7 (50.8) million in the first six months, which corresponds to a cash flow margin of 10.2 (11.5) percent.

TAKKT EUROPE: conditions remain challenging
The TAKKT EUROPE division was able to improve its turnover to EUR 263.3 (245.4) million, an increase of 7.3 percent compared to the first half-year 2012, thanks to the turnover contribution of the Ratioform Group. Organic turnover fell by 9.2 percent due to a decline in order numbers and the average order value as a result of economic developments. European business contributed 56.1 (55.3) percent to consolidated turnover. Ratioform's performance was encouraging, the Packaging Solutions Group (PSG) achieved stable business volumes compared to the pro forma turnover of the previous year. In contrast, the reluctance of many European companies to invest had more of an impact on the sale of plant, office and warehouse equipment. Because of this, the Business Equipment Group (BEG) reported a decline in turnover in the high single-digit percentage range, while the Office Equipment Group (OEG) saw a decrease in the low double-digit percentage range. The EBITDA of the division amounted to EUR 51.7 (53.6) million in the first half-year. This resulted in an EBITDA margin of 19.6 (21.8) percent. Adjusted for Ratioform, the EBITDA margin amounted to 19.0 percent.

TAKKT AMERICA: strong performance from the Specialties Group (SPG)
The second division of the TAKKT Group also benefited from the acquisitions carried out in 2012 during the first half-year 2013. GPA made a major contribution to the turnover of TAKKT AMERICA and its increase of 4.1 percent to EUR 206.3 (198.2) million. When adjusted for currency effects and the turnover contributed by GPA in the first quarter, turnover was down slightly by 1.7 percent. North American business accounted for 43.9 (44.7) percent of consolidated turnover in the first half-year. Economic developments in the USA have been far more stable than those in Europe since the start of the year. However, the public sector has had to reduce its spending as a result of the cuts to the federal budget that were enacted in the USA at the beginning of the year. This had a particularly significant impact on the amount of turnover that the Office Equipment Group (OEG) was able to generate, as a number of its customers are public institutions. The OEG reported a decrease in turnover in the high single-digit percentage range in the first half-year. The Plant Equipment Group (PEG) endured a fall in turnover in the low double-digit percentage range. The turnover of the Specialties Group (SPG) saw an increase in the double-digit percentage range. This was also due to GPA's good performance. The increase in organic turnover was in the mid-single-digit percentage range. TAKKT AMERICA's EBITDA came to EUR 19.9 (20.9) million. The corresponding EBITDA margin amounted to 9.6 (10.5) percent. When adjusted for the EBITDA contributed by GPA in the first quarter, the margin was 9.0 percent. When additionally adjusted for the additional costs for the variable purchase price liability for GPA recognised in the second quarter, the margin was 9.7 percent.

TAKKT share: significant increase in free float due to Haniel placement
TAKKT's majority shareholder Franz Haniel & Cie. GmbH successfully placed a total of 13.4 million TAKKT shares on the market between 24 and 27 June 2013 as part of a multi-day book building process. The shares were acquired by foreign and domestic institutional investors. The Management Board is especially pleased about the higher level of free float, as this increases the liquidity of the TAKKT share and makes it more attractive to existing and new investors.

Outlook: confidently looking forward to the second half-year
Despite the challenging economic situation, particularly in Europe, the middle scenario of the three scenarios outlined in the forecast report of the annual report 2012 is still realistic. This scenario predicts a slight organic turnover growth of between one and three percent over the course of the entire financial year 2013. TAKKT currently expects organic turnover growth to come in at the lower end of this range. The company performed in line with expectations in the second quarter, which is a thoroughly positive development. The achievement of the forecast scenario depends on the European economy recovering as expected as well as a noticeable improvement in business with public institutions in the USA. Economic indicators are pointing towards an emerging improvement in Europe's economic situation. The purchasing manager index, which is a reliable indicator of TAKKT's business, neared the 50-point mark in the Eurozone recently. It is currently above this mark in the USA.

Under these assumptions, the EBITDA margin will be in the upper third of the target range of 12 to 15 percent as forecast. The acquisition effect from the additional turnover contributions by GPA in the first quarter and Ratioform in the first half-year amounts to around six percentage points for the full year 2013 and will add to the organic turnover development. 'If Europe's economic recovery begins early enough and the uncertainty about the budget situation decreases in the US, we are optimistic that we will be able to reach our objectives for the year as a whole,' said CEO of TAKKT AG Felix Zimmermann, demonstrating his confidence for the second half-year.

Conference call
We invite you to directly address the Management Board with your questions. We will be hosting a conference call for this purpose at 15:00 (CEST) on 30 July 2013, during which we will be open to questions. To take part, please dial the following number: +49 69 201744-220 (access code: 779134#).

Financial calendar
The figures for the first nine months 2013 will be published on 31 October 2013.

IFRS figures for TAKKT Group to the end of HY1 2013:
(in EUR million)

Change in %  
HY1 2013
HY1 2012 Change in %
TAKKT Group turnover 233.6 220.7 5.8 469.5 443.5 5.9
organic growth     -2.1     -5.8
TAKKT EUROPE 127.9 114.1 12.1 263.3 245.4 7.3
TAKKT AMERICA 105.7 106.6 -0.8 206.3 198.2 4.1
EBITDA 30.4 29.9 1.7 67.3 69.7 -3.4
EBITDA margin (%) 13.0 13.5   14.3 15.7  
EBIT 23.7 25.3 -6.3 54.0 61.2 -11.8
EBIT margin (%) 10.1 11.5   11.5 13.8  
Profit before tax 20.4 23.1 -11.7 47.5 57.6 -17.5
Pre-tax profit margin (%) 8.7 10.5   10.1 13.0  
TAKKT cash flow 21.7 22.2 -2.3 47.7 50.8 -6.1
TAKKT cash flow margin (%) 9.3 10.1   10.2 11.5  

Short profile of TAKKT AG
TAKKT is the leading B2B direct marketing specialist for business 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 200,000 products for the areas of plant and warehouse equipment, classic and design-oriented office furniture and accessories, transport packaging, display articles, supplies for retailers, the food service industry and the hotel market.

TAKKT Group has over 2,500 employees and more than three million customers worldwide. TAKKT AG is listed on the SDAX and was admitted to Deutsche Boerse's Prime Standard on 01 January 2003.

Dr Felix A. Zimmermann, CEO, Tel. +49 711 3465-8201
Dr Claude Tomaszewski, CFO, Tel. +49 711 3465-8207

Email: investor@takkt.de

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