TAKKT: Solid operating key figures thanks to diversification strategy
 

• Consolidated turnover increased by 1.3 percent to EUR 952.5 million (previous year (EUR 939.9 million); organic decline in turnover of 2.6 percent
• EBITDA margin at 12.9 (14.2) percent; adjusted for one-off effects, margin of 14.1 percent almost at the level of the comparable prior-year figure (14.4 percent)
• TAKKT cash flow reaches EUR 83.4 (92.7) million
• Dividend of EUR 0.32 per share proposed
• Organic increase in turnover of three to five percent and higher operating profitability expected for the 2014 financial year

Stuttgart, Germany, March 20, 2014. In the difficult economic environment of 2013, TAKKT was able to increase its consolidated turnover in the reporting currency of euros by 1.3 percent to EUR 952.2 (939.9) million, primarily due to the positive effects from the acquisitions of the previous year. Adjusted for acquisition and currency effects, consolidated turnover declined by 2.6 percent. The development of turnover corresponds to the cautious scenario outlined in the forecast report of the previous year. TAKKT was especially affected by the weak economic situation in Europe. While the economic development was considerably better in the USA, the budget dispute at the federal level still put a strain on some of TAKKT's American companies.

Felix Zimmermann, CEO of TAKKT AG, explains the reasons for the operational development: "TAKKT has a carefully balanced portfolio of B2B direct marketing specialists. Our Group companies distinguish themselves through their individual focus on different product ranges, sales regions and distribution channels. This allows them to cater to different customer groups from various industries. This strategy has proved itself once again in the year under review. TAKKT is therefore broadly positioned and was also able to produce solid operating key figures even under difficult conditions."

Increased gross profit margin due to acquisitions; EBITDA margin in target corridor
The Group's profit margin increased to 43.6 (43.3) percent in 2013 due to the acquisitions. This is mainly attributable to the gross profit margins of the GPA and Ratioform companies acquired in the previous year, which are above the Group average. EBITDA (earnings before interest, taxes, depreciation and amortization), the TAKKT Group's important key performance indicator for operational profitability, decreased to EUR 122.8 million (133.7) also due to several one-off effects. The EBITDA margin of 12.9 (14.2) percent was significantly below the previous year level and thus at the lower half of the internal target corridor of 12 to 15 percent.

For the 2013 financial year, three one-off effects need to be taken into account: First, the decision to gradually discontinue operations of the European Topdeq group resulted in a negative effect on earnings of EUR 6.2 million. Second, the outstanding variable liability for the US-based company GPA was adjusted as the company developed better than expected. In the final quarter of 2013, the outstanding variable components for the acquisition that had been contractually agreed upon were set to a fixed sum by means of a contract modification together with the former owners. The adjustment and subsequent stipulation of the purchase price liability resulted in an expenditure totaling EUR 3.6 million. Third, the option to expand the central warehouse in Kamp-Lintfort was not exercised, which resulted in a compensation payment of EUR 2.0 million. Adjusted for the one-off effects, the EBITDA margin of 14.1 percent was close to the level of the comparable prior-year figure of 14.4 percent.

Group profit decreased by 21.6 percent to EUR 52.5 (67.0) million. Accordingly, earnings per share fell to EUR 0.80 (1.02).

Business model with strong cash flow proves itself in difficult environment
The TAKKT cash flow - defined as the result for the period plus depreciation and amortization, impairment of non-current assets and deferred taxes affecting profit and loss - 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 sums it up: "A key strength of our business model is its high internal financing power. This allowed us to generate high cash flow even in the difficult economic environment of last year and to pay off a significant portion of our financial debt. Given the solid financing and healthy balance sheet structure, the TAKKT Management Board and Supervisory Board will propose at the Shareholders' Meeting that a dividend of EUR 0.32 per share be paid out as in the previous year."

TAKKT EUROPE: Good development at Ratioform; discontinuation of the Topdeq business
In the TAKKT EUROPE division, turnover increased by 2.0 percent to EUR 524.4 (515.1) million. The share in consolidated turnover increased slightly to 55.1 (54.8) percent. The Ratioform company acquired in 2012 was consolidated for the first time over the entire year and thereby contributed to the turnover growth of the division. Organically, i.e. adjusted for currency and acquisition effects, turnover was down by 5.3 percent. While the Business Equipment Group (BEG) and the Office Equipment Group (OEG) had to absorb a decrease in turnover in percentage terms in the mid single-digit respectively in the low double-digit percentage range, the Packaging Solutions Group (PSG) showed slight growth in comparison to the pro forma turnover of the previous year.

The EBITDA margin of TAKKT EUROPE 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 not exercising the warehouse expansion option. Adjusted for the two one-time effects, the margin was 18.6 percent.

TAKKT AMERICA - Organic turnover growth despite damper from budget dispute
In the TAKKT AMERICA division, turnover in the 2013 financial year increased by 0.5 percent to EUR 427.5 (425.2) million. The share in consolidated turnover declined slightly to 44.9 (45.2) percent. The division profited from the first-time consolidation of the Group company GPA for a full reporting year. An opposing effect on turnover arose from the weaker US dollar as compared to the previous year, which took a toll on the turnover reported in euros of TAKKT AMERICA. Adjusted for currency and acquisition effects, turnover increased by 0.7 percent. Despite the better economic situation in North America compared to Europe, some parts of the US business were adversely affected by the budget dispute in the US Congress. While the Plant Equipment Group (PEG) and the Office Equipment Group (OEG) both had to deal with a decrease in turnover in the high single-digit percentage range, the Specialties Group (SPG) achieved turnover growth in the country currency in the high single-digit percentage range.

The EBITDA margin of TAKKT AMERICA in the year under review was 9.9 (9.7) percent. Adjusted for the aforementioned adjustment to the purchase price liability of GPA, the EBITDA margin of the division came to 10.7 percent and thus once again above the level of the previous year (10.4 percent).

TAKKT 2014 Sustainability Report published
TAKKT has come measurably closer to its goal of becoming a role model in terms of sustainability in its industry by 2016. For example, carbon-neutral products could be offered for the first time with the new EUROKRAFT Active Green performance brand. In addition, a large part of the paper advertising materials were switched over to certified sustainable sources. Moreover, TAKKT has been sending its parcels in 15 European countries using carbon-neutral shipping since January 2013. With these measures, TAKKT is not only contributing to environmental protection but also positioning itself in the competitive environment early on. The focus areas, measures and goals are presented in a new sustainability report, which is published today.

Outlook: Early economic indicators point to an upswing
The early economic indicators for the development of business that are relevant for TAKKT point to significant growth in turnover and earnings in 2014. Zimmermann comments: "For 2014, under improved economic conditions we expect a return to organic turnover under improved economic conditions in the amount of TAKKT's long-term organic growth rate. In addition, we will invest more heavily in the development of our business model to become an integrated multi-channel company."

The Management Board currently considers the following scenario for 2014 to be most likely. TAKKT expects the GDP growth rate to improve significantly compared to the past year. In addition, purchasing manager index values that are significantly over 50 points are expected. Given these economic conditions, the Group should be able to realize organic turnover growth of between three and five percent and an EBITDA margin in the mid-range of the self-imposed target corridor of 12 to 15 percent. For the number of orders as well as for the average order value, an increase can be expected compared to the year under review. North American economic forecasts continue to look somewhat more favorable than those in Europe. A deviation from the most likely scenario, depending on the economic development and political events, cannot be ruled out. Zimmermann explains: "The economic improvement in our sales markets is an important condition for TAKKT to be able to show good organic turnover." We also see opportunities in the further diversification of our business model and in the integrated multi-channel concept that we are driving forward with our Group-wide strategic DYNAMIC initiative."

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

Financial calendar
The TAKKT figures for the first three months of 2014 will be published on April 29, 2014. The Shareholders' Meeting will be held at the Forum Ludwigsburg on May 06, 2014.


About 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 has been in the Deutsche Boerse Prime Standard since January 1, 2003.

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

Email: investor@takkt.de