TAKKT: Solid operating key figures in a difficult financial year

TAKKT AG / Key word(s): Preliminary Results

20.02.2014 / 07:29

TAKKT: Solid operating key figures in a difficult financial year

  • 1.3 percent increase in turnover in the reporting currency of euros, decline in organic turnover of 2.6 percent
  • EBITDA margin at 12.9 (2012: 14.2) percent, at 14.1 percent when adjusted for one-off effects
  • TAKKT cash flow reaches EUR 83.4 (92.7) million
  • Earnings per share at EUR 0.80 (1.02)

Stuttgart, Germany, February 20, 2014. The financial year 2013 was shaped by the weak economic situation in Europe while the USA showed much stronger economic data. The fiscal disputes at the federal level in the USA did, however, have a negative impact on the US business of some TAKKT companies. In terms of the top line, TAKKT was able to increase consolidated turnover in the reporting currency by 1.3 percent to EUR 952.5 (939.9) million. Adjusted for acquisition and currency effects, consolidated turnover dropped by 2.6 percent. Felix Zimmermann, CEO of TAKKT AG, summed it up: 'The financial year 2013 was not easy for TAKKT due to the general economic conditions. The diversification of our business model proved itself in this environment once again. As a result, we are able to present solid operating key figures today.'

Gross profit margin higher than previous year; EBITDA margin decreased due to one-offs
The gross profit margin increased to 43.6 (43.3) percent in the financial year 2013 due to the acquisitions. The EBITDA (earnings before interest, tax, depreciation and amortization) decreased to 122.8 (133.7) million euros. The margin was thus significantly below the previous year's level at 12.9 (14.2) percent and at the lower half of the internal target corridor of 12 to 15 percent.

There are three one-time effects to note in the financial year 2013: First, the TAKKT Management Board made the announcement in October of last year to phase-out the operational business of the Topdeq Group. Second, the contingent purchase price liability for the US-based company GPA was adjusted as the company developed better than expected. In the fourth quarter, the purchase price liability was set at a fixed sum together with the former owners. Third, a contractually agreed compensation payment was due in the final quarter as TAKKT had made the decision to pass on the option to expand the warehouse in Kamp-Lintfort. In total, these three one-time effects had an impact of 11.8 million euros on the results.

Adjusted for these one-time effects, the EBITDA margin of 14.1 percent was close to that of the previous year. As a result of higher finance expenses as well as an increase in planned amortization of intangible assets related to the acquisitions made in 2012, the earnings per share amounted to 0.80 (1.02) euros. The TAKKT cash flow - defined as profit plus depreciation and amortization, impairment of non-current assets and deferred tax affecting profit - amounted to EUR 83.4 (92.7) million. This corresponds to a cash flow margin of 8.8 (9.9) percent and a TAKKT cash flow per share of EUR 1.27 (1.41).

CFO Claude Tomaszewski explains: 'TAKKT's business generates high cash flow even in a difficult market environment. Subject to the approval of the Supervisory Board, the Management Board and Supervisory Board of TAKKT will thus propose at the Shareholders' Meeting that a dividend of EUR 0.32 per share be paid out as in the previous year.'

TAKKT EUROPE: Ratioform shows organic growth - Phase-out of Topdeq operations
Despite the sluggish recovery of the European economy, the TAKKT EUROPE division was able to increase its turnover by 2.0 percent to 525.4 (515.1) million euros thanks to the yearlong consolidation of Ratioform. The share of consolidated turnover increased slightly to 55.1 (54.8) percent. Organically, i.e. adjusted for currency and acquisition effects, turnover was down by 5.3 percent.

The groups within the TAKKT EUROPE division developed differently. The Packaging Solutions Group (PSG) performed best. It showed slight growth in comparison to pro forma turnover of the previous year. The Office Equipment Group (OEG) had to absorb a decrease in turnover in the two-digit percent range while the Business Equipment Group (BEG), the largest group in the division, recorded losses in turnover in the mid-single figure percentage range.

The EBITDA margin of the division decreased to 17.0 (19.8) percent in light of the weak economy as well as one-time effects from the discontinuation of Topdeq and the compensation payment from the expansion option. Adjusted for the two one-time effects, the margin was 18.6 percent.

TAKKT AMERICA: Fiscal dispute puts damper on business - GPA shows very good turnover development
The TAKKT AMERICA division achieved turnover of 427.5 (425.2) million euros in the financial year 2013, 0.5 percent higher than the previous year. TAKKT AMERICA profited from the first-time consolidation of the Group company GPA for a full reporting year. The weakness of the US dollar had a contrary effect on turnover in euros. Adjusted for currency and acquisition effects, turnover increased by 0.7 percent. The economic situation in North America was better than in Europe, though the fiscal disputes in the American Senate had adverse effects on business there.

The groups within the TAKKT AMERICA division developed differently. The Specialties Group (SPG) achieved turnover growth in the local currency in the mid-single-digit percentage range even without the acquisition effect of GPA. The food retail and food service industries as well as the restaurant industry developed positively and GPA was even able to grow by more than 20 percent. The Plant Equipment Group (PEG), which mainly supplies the manufacturing industry as a full-service provider for storage and material handling equipment, had to accept a decrease in turnover in the high single-digit percentage range due to the demanding competitive environment. The Office Equipment Group (OEG) suffered as a result of the buying reluctance of the American federal institutes and also had to accept a decrease in turnover in the high single-digit percentage range.

The EBITDA margin for TAKKT AMERICA in the year under review came to 9.9 (9.7) percent. Adjusted for the aforementioned adjustments to the purchase price liability of GPA, the EBITDA margin of the division amounted to 10.7 percent.

Final quarter of 2013 sees slight increase in organic turnover
In the final quarter of 2013, consolidated turnover of 239.1 (244.5) million euros was 2.2 percent below the previous year level. Organic turnover grew by 0.5 percent. While the organic turnover of TAKKT EUROPE decreased by 1.3 percent, TAKKT AMERICA grew by 3.0 percent. The TAKKT Group EBITDA amounted to 19.5 (25.6) million euros in the fourth quarter of 2013 at a margin of 8.1 (10.5) percent. Herein, parts of the above-mentioned one-time effects are included.

Early indicators point to recovery in 2014
The early economic indicators for the business development that are relevant for TAKKT point to significant growth in turnover in 2014. Zimmermann explains: 'After two economically challenging years with declines in organic turnover, we expect a return to significant organic growth in the range of TAKKT's long-term organic growth rate under improved economic conditions in 2014. We will also invest more in the continued development of our business model to becoming an integrated multi-channel company.' A forecast of the Group's business performance for the entire year will be given at the financial statements press conference in March.

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 3:00 p.m. (CEST) on February 20, 2014. To take part, please dial the following number: +49 69 201744-220 (access code: 779134#).

Financial statements press conference
Further details on the 2013 annual financial statements and anticipated future business developments will be published at the financial statements press conference, which will be held in Stuttgart on March 20, 2014.

Preliminary IFRS figures for the TAKKT Group for the financial year 2013
(in EUR million)

in %
in %
TAKKT Group turnover   239.1  244.5 -2.2   952.5  939.9 +1.3
Organic growth     +0.5     -2.6
TAKKT EUROPE 139.9 143.1 -2.2 525.4 515.1 +2.0
TAKKT AMERICA 99.4 101.6 -2.2 427.5 425.2 +0.5
EBITDA 19.5 25.6 -23.8 122.8 133.7 -8.2
EBITDA margin (%) 8.1 10.5   12.9 14.2  
EBIT 12.4 19.0 -34.7 95.8 111.6 -14.2
EBIT margin (%) 5.2 7.8   10.1 11.9  
Profit before tax 7.8 14.1 -44.7 81.2 100.0 -18.8
Pre-tax profit margin (%) 3.3 5.8   8.5 10.6  
TAKKT cash flow 11.6 15.3 -24.2 83.4 92.7 -10.0
TAKKT cash flow margin (%) 4.9 6.3   8.8 9.9  

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 January 1, 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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