TAKKT realises slight organic turnover growth in the third quarter of 2013

TAKKT AG / Key word(s): Quarter Results

31.10.2013 / 07:30

P R E S S   R E L E A S E

TAKKT realises slight organic turnover growth in the third quarter of 2013

  • Continuation of the positive turnover trend in the third quarter (organic: plus 0.1 percent, compared to minus 2.1 percent in the second quarter and minus 9.5 percent in the first quarter)
  • Consolidated turnover up by 2.6 percent in the first nine months; organic turnover down by 3.7 percent
  • EBITDA margin amounts to 14.5 (first nine months of 2012: 15.5) percent
  • Earnings per share at EUR 0.74 (0.86)
  • TAKKT intends to phase-out Topdeq's operating business

Stuttgart, Germany, 31 October 2013. The first nine months of the financial year 2013 were characterised by a difficult economic situation in the eurozone. Many companies' willingness to invest was accordingly limited. A further factor were the ongoing budget discussions in the USA, which led to budget cutbacks for many federal agencies and thus impacted on the North American business of some TAKKT companies. The eurozone's recovery, which has been looming for some months now, and the continued robust state of overall demand in the USA have provided further buoyancy for the upswing that materialised around halfway through the year. With organic - i.e. adjusted for currency and acquisition effects - turnover growth of 0.1 percent in the third quarter, the TAKKT Group was able to report a return to organic turnover growth by comparison with the previous year's period after five negative quarters.

In the first nine months of the current financial year, the turnover of the TAKKT Group amounted to EUR 713.4 (695.4) million, an increase of 2.6 percent on the previous year's period. Adjusted for currency effects as well as the acquisition effects resulting for GPA in the first quarter and for Ratioform for the first half of the year, turnover declined by 3.7 percent. Halfway through the year, the organic decline in turnover had amounted to 5.8 percent. Claude Tomaszewski, CFO of TAKKT AG, comments: 'It is clear that the positive momentum from the second quarter has continued. However, to date the upswing has fallen short of our expectations. This also reflects imponderabilities such as the US budget dispute.' The two companies acquired in the previous year, GPA and Ratioform, have realised favourable performances. Thanks to their contribution, the gross profit margin has climbed to 43.7 (43.2) percent. Adjusted for the effects of these acquisitions, the gross profit margin was at 42.9 percent.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 103.3 (108.1) million in the period under review. The corresponding margin declined to 14.5 (15.5) percent. This was partly due to a lower level of utilisation of infrastructure. Adjusted for acquisition effects, this figure amounted to 13.8 percent. The TAKKT cash flow - defined as profit plus depreciation, impairment of non-current assets and deferred tax affecting profit - amounted to EUR 71.8 (77.4) million in the first nine months of the year, which corresponds to a cash flow margin of 10.1 (11.1) percent.

TAKKT EUROPE: recovery continues
The TAKKT EUROPE division increased its turnover by 3.6 percent to EUR 385.5 (372.0) million thanks to acquisition effects and thus contributed 54.0 (53.5) percent of consolidated turnover. The positive trend which had already materialised halfway through the year remained intact. While organic turnover in the first nine months of the year fell by 6.9 percent, in the third quarter this figure fell by 2.4 percent on the previous year's period.

In the first nine months of the year, the EBITDA of TAKKT EUROPE amounted to EUR 71.8 (74.9) million. This resulted in an EBITDA margin of 18.6 (20.1) percent. Adjusted for the earnings contributed by Ratioform in the first half of the year, the EBITDA margin amounted to 18.1 percent.

TAKKT AMERICA: strong performance from the Specialties Group (SPG)
The TAKKT AMERICA division likewise benefited from TAKKT Group's targeted acquisition policy in the first nine months of the year. GPA's favourable performance was a key factor in the division's 1.4 percent turnover improvement to EUR 328.1 (323.6) million. Business in North America accounted for 46.0 (46.5) percent of consolidated turnover. Adjusted for the acquisition effects for GPA, which was added to TAKKT Group at the start of the second quarter 2012, and for currency effects, turnover was at exactly the same level in the period from January to September as in the previous year. In the third quarter, the lower US dollar exchange rate versus the reporting currency, the euro, was reflected in a turnover decline of 2.8 percent on the previous year's period. Adjusted for currency effects, growth of 2.7 percent was realised in this period. Once again the Specialties Group (SPG) proved itself as a growth engine in the third quarter. In the period under review, this group's turnover grew significantly, whereas turnover in the other two US groups declined.

At EUR 37.8 (40.0) million, the EBITDA of the TAKKT AMERICA division fell by comparison with the same nine-month period in the previous year. The EBITDA margin was also lower than in the previous year at 11.5 (12.4) percent. Adjusted for acquisition effects, the EBITDA margin amounted to 11.2 percent. The earnings of TAKKT AMERICA suffered above all due to a lower rate of capacity utilisation resulting from the falling public-sector demand. The purchase price adjustment completed in the second quarter for GPA's acquisition had an additional negative effect on earnings.

TAKKT intends to phase-out Topdeq's operating business
TAKKT is planning to gradually phase-out Topdeq's operating business due to the persistent loss-making situation. Topdeq, which serves as the Office Equipment Group in the TAKKT EUROPE division, remained below expectations even after being repositioned twice. On account of these planned measures, TAKKT envisages additional one-off costs of between approx. six to eight million euros, of which approx. two-thirds will arise in the remainder of 2013. The cash requirement for this gradual closure is estimated at between approx. one to two million euros for 2013 and 2014.

Outlook: favourable indicators
In view of the continuing losses of turnover in business with federal agencies in the USA and the halting recovery in Europe, TAKKT expects its organic turnover for the year as a whole to decline by approx. three percent. Including the acquisition effects, TAKKT will likely realise currency-adjusted growth of approx. three percent. Including additional one-off costs associated with the phase-out of Topdeq's operating business, an EBITDA margin of approx. 13 percent is expected. The medium-term outlook for TAKKT remains buoyant, since the indicators continue to point to an economic recovery in Europe.

In view of these trends, the CEO of TAKKT AG, Felix Zimmermann, has an optimistic view of the next few months: 'In Europe we are seeing the first tangible signs of economic recovery. We expect that this positive momentum will remain intact, which should then be reflected in our business figures.'

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 (CET) on 31 October 2013. To take part, please dial the following number: +49 69 201744-220 (access code: 779134#).

Financial calendar
TAKKT will present the preliminary figures for the financial year 2013 on 20 February 2014.

IFRS figures for TAKKT Group for the first nine months of 2013:
(in EUR million)

in %
in %
TAKKT Group turnover 243.9 251.9 - 3.2 713.4 695.4 2.6
Organic growth     0.1     - 3.7
TAKKT EUROPE 122.2 126.6 - 3.5 385.5 372.0 3.6
TAKKT AMERICA 121.8 125.4 - 2.8 328.1 323.6 1.4
EBITDA 36.0 38.4 - 6.3 103.3 108.1 - 4.4
EBITDA margin (%) 14.8 15.2   14.5 15.5  
EBIT 29.4 31.4 -6.4 83.4 92.6 - 10.0
EBIT margin (%) 12.1 12.5   11.7 13.3  
Profit before tax 25.9 28.3 -8.5 73.4 85.9 - 14.6
Pre-tax profit margin (%) 10.6 11.2   10.3 12.4  
TAKKT cash flow 24.1 26.6 -9.4 71.8 77.4 -7.2
TAKKT cash flow margin (%) 9.9 10.6   10.1 11.1  

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.

The 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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