TAKKT sees stabilization of business in the third quarter

• Organic sales development improved to minus 12.2 percent
• Cost management continued while flexibly adjusting expenses to the stabilizing demand
• EBITDA in the third quarter at 22.5 million euros; in addition to the decrease in sales, one-time costs had a negative impact on earnings
• Free TAKKT cash flow after nine months at 115.8 million euros
• For 2020, TAKKT expects sales of around EUR 1.05 billion and an EBITDA after one-off effects between EUR 85 and 95 million

Stuttgart, Germany, October 29, 2020. The coronavirus pandemic and its economic effects continue to be the key influencing factors for TAKKT's business. After a volatile first half of the year, business development stabilized in the third quarter. The economic recovery compared to the second quarter and more optimistic assessments by many customer groups led to an increase in demand for business equipment. At the same time, demand for infection control products decreased over the course of the quarter. From July to September, organic sales development was minus 12.2 percent, which was an improvement compared to the second quarter (minus 21.2 percent) and the first half of the year (minus 15.6 percent). Currency effects, especially as a result of the weaker US dollar, had a negative impact on reported sales, which were 14.0 percent below the previous year. Overall, TAKKT generated sales of EUR 270.4 (314.3) million in the third quarter.

"We continued our cost management in the third quarter while flexibly adjusting marketing and personnel expenses to the stabilizing demand", explains CFO Claude Tomaszewski. In addition to the decrease in sales, one-time costs also had a negative impact on earnings. These were attributable to the early termination of employment contracts as well as expenses for the implementation of TAKKT 4.0 and came to around EUR 5 million. One-time costs of around EUR 3 million were incurred in the corresponding period of the previous year. Overall, EBITDA in the third quarter amounted to EUR 22.5 (39.4) million; the EBITDA margin came to 8.3 (12.5) percent.

In the first nine months, TAKKT generated sales of EUR 796.8 (923.1) million, corresponding to a 13.7 percent decrease over the previous year. Adjusted for acquisition and currency effects, organic sales development was minus 14.4 percent. The gross profit margin amounted to 40.0 (41.3) percent. The decrease resulted mainly from the valuation of inventories. Additional obsolescence reserves had to be made on existing inventories due to the lower sales level. After nine months, EBITDA reached EUR 74.1 (118.1) million, while the margin came to 9.3 (12.8) percent. In total, positive and negative one-time effects had a negative impact of around EUR 8.5 million on EBITDA in the reporting period. In the previous year, one-time costs amounted to around EUR 4.5 million. Despite the difficult environment, TAKKT generated very strong free cash flow in the first nine months. Significant cash inflows resulted from the release of net working capital. The cash flow also benefited from the sale of real estate in the second quarter. The free TAKKT cash flow thus increased significantly to EUR 115.8 (88.2) million. "Our financials for the first nine months and the high free cash flow demonstrate the resilience and flexibility of our business model in the challenging 2020 fiscal year", says CEO Felix Zimmermann.

TAKKT will continue to exercise flexible cost management in the fourth quarter. With regard to the further stabilization of demand and in preparation for the new fiscal year, the Group will increasingly focus on developing sources of growth toward the end of the year. Given the more stable business performance in the third quarter, TAKKT gave a more precise forecast in October. The TAKKT Management Board now expects sales of around EUR 1.05 billion for the year as a whole and a reported EBITDA of between EUR 85 and 95 million. EBITDA is expected to be adversely affected by one-time costs of around EUR 15 million. This is countered by a one-time gain of around EUR 4.5 million. Adjusted for these effects, TAKKT expects EBITDA to be in the range of EUR 95 to 105 million and an EBITDA margin of just below ten percent despite the effects of the coronavirus pandemic.

In view of the rise in infections, TAKKT is prepared to react flexibly to stricter government requirements for infection protection, such as in the case of regional or national lockdowns. Depending on the extent and length of these requirements, a negative impact on business development in the fourth quarter cannot be ruled out.

Conference call: October 29, 2020, at 2:00 p.m. (CET).
The login details to participate in the earnings call can be found under the following link:
www.takkt.de/event/

Financial calendar:
TAKKT will publish the preliminary figures for the financial year 2020 on February 18, 2021.

IFRS figures for the TAKKT Group as of the end of the third quarter 2020
(in EUR million)

About TAKKT AG
TAKKT is the leading B2B distance seller for business equipment in Europe and North America. The Group focuses on two business models - Omnichannel and Web-focused Commerce. The Omnichannel Commerce segment addresses corporate customers with complex requirements over numerous contact points and with a wide range of services. The Web-focused Commerce segment concentrates its offers primarily via web shops on the less complex requirements of more price-conscious B2B customers. The product range of the subsidiaries comprises more than a 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 is represented with its brands in more than 25 countries and employs approximately 2,500 people. The company is listed on the SDAX and Deutsche Börse Prime Standard.
 

Contacts:
Michael Loch Tel. +49 (0) 711 3465-8222
Benjamin Bühler Tel. +49 (0) 711 3465-8223
Email: investor@takkt.de