TAKKT Expects Higher Organic Growth in 2018 and to Forge Ahead with Digital Transformation

• Organic growth of 0.4 percent in 2017
• Given negative currency effects, reported sales declined by 0.8 percent to EUR 1,116.1 (1,125.0) million
• Gross profit margin of 42.5 (42.6) percent nearly at the previous year's level
• EBITDA margin of 13.5 (15.2) percent is lower, as expected; a decline of one percentage point when adjusted for one-time gains in the previous year
• Unchanged dividend of EUR 0.55 per share proposed
• Organic growth between two and four percent expected for 2018
• Continuing investments for implementing the Digital Agenda

Stuttgart, Germany, March 21, 2018. "2017 was a challenging financial year," remarked Felix Zimmermann, CEO of TAKKT AG. "The overall economic conditions were good. However, there were effects in some of our markets that impacted business performance negatively. As a result, we have achieved only slight organic sales growth of 0.4 percent, significantly below our expectations." Due to negative currency effects, Group sales declined by 0.8 percent in the year under review to EUR 1,116.1 (1,125.0) million.

The gross profit margin of 42.5 (42.6) percent was approximately at the level of the previous year. EBITDA declined significantly to EUR 150.3 (171.3) million. This is primarily attributable to positive one-time gains in the previous year, higher costs as anticipated for the implementation of the Digital Agenda, and weak sales development. The EBITDA margin of 13.5 (15.2) percent was in the middle of the long-term target corridor of 12 to 15 percent. Adjusted for one-time gains in the previous year, profitability amounted to 13.5 (14.5) percent.

In the 2017 financial year, reported sales in the TAKKT EUROPE segment increased by 2.1 percent to EUR 575.0 (563.3) million. Organic sales growth reached 2.6 percent, with both divisions recording similar growth. The EBITDA margin of the TAKKT EUROPE segment decreased to 16.9 (19.0) percent.

At EUR 541.4 (562.0) million, reported sales for TAKKT AMERICA were 3.7 percent lower than the value of the previous year. The decline in organic sales came to 1.9 percent. While the MEG division recorded significantly lower sales than in the previous year, the other divisions achieved organic sales increases in the low single-digit percentage range. The EBITDA margin of the segment decreased to 12.0 (13.7) percent.

Strategically, the focus for TAKKT in the year under review was on the implementation of the Digital Agenda. Initial measures have already been completed and integrated into day-to-day operation. They primarily involved building internal teams for web shop development or data analysis, the provision of technical infrastructure, the connecting and linking of suppliers, customer journey analyses and the derivation of personas for relevant customer groups. Until year-end 2017, TAKKT has filled 78 positions which were newly created as part of the Digital Agenda.

TAKKT was also able to achieve further progress with its sustainability initiative. For example, KAISER+KRAFT Germany operates on a completely carbon-neutral basis as of the beginning of 2018. TAKKT has set ambitious goals for the coming years. The recently published sustainability report shows progress made in defined focus areas and the goals set for 2020.

The Management Board and Supervisory Board of TAKKT AG will propose to the Shareholders' Meeting in May the payment of a dividend of EUR 0.55 per share for the financial year 2017. This would correspond to a payout ratio of 37.5 percent of the profit for the period. Adjusted for a non-cash one-time gain from the revaluation of deferred tax liabilities as a result of the US tax reform, the payout ratio would come to 46.3 percent.

For the current financial year, TAKKT expects an overall favorable market environment in Europe. In the US, however, there is still uncertainty in some market segments. In addition, negative effects on sales of about one percentage point are expected from the phase-out of the Dallas Midwest sales brand, the consolidation of gaerner with the KAISER+KRAFT sales brand in several domestic markets and the nearly completed negotiations for a new framework agreement with a major Hubert group customer. "Under these conditions we want to achieve higher organic growth than in 2017. We expect an organic growth of between two and four percent in 2018," CFO Claude Tomaszewski explains. Although stronger expected growth compared to 2017 should have a positive effect on profitability, the above-mentioned framework agreement at Hubert is expected to have a negative impact of almost half a percentage point on the EBITDA margin of the Group. Expenses for the implementation of the Digital Agenda are expected at a similar level as in 2017. Overall, the EBITDA margin is expected to fall within the middle third of the target corridor of 12 to 15 percent.

Key Figures for the TAKKT Group for the 2017 Financial Year
(in EUR million)

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 subsidiaries comprises more than one million products for the areas of plant and warehouse equipment, office furniture, transport packaging, display articles and equipment for the food service industry, hotel market and retailers. The TAKKT Group has over 2,000 employees. The company is listed on the SDAX and Deutsche Börse Prime Standard.

Contacts:
Dr. Christian Warns Tel. +49 (0) 711 3465-8222
Giuseppe Palmieri Tel. +49 (0) 711 3465-8250

Email: investor@takkt.de