Takkt AG

TAKKT Group reports good profitability even in ...




Takkt AG / TAKKT Group reports good profitability even in the crisis year - ordinary dividend remains unchanged processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement. 


Modest recovery and increase in profitability expected for 2010



Stuttgart, Germany, 22 March 2010. The economic crisis and the subsequent
depression in demand brought a clear turnover and earnings decrease for TAKKT
Group in 2009. "We nevertheless believe that we are emerging stronger from the
recession," stated CEO Dr Felix A. Zimmermann at today's financial statements
press conference in Stuttgart. "Due to our highly cash-generative business model
and strong financial background, we still had sufficient flexibility in 2009 to
make way for further future profitable growth with the takeover of Central
Restaurant Products (Central) and the expansion of our e-business despite the
tense overall economic situation." A return to the growth path is expected for
the current year.



Significant events in 2009

  * Turnover down by 26.2 percent adjusted for currency and acquisition effects
  * Double-digit adjusted operational margin
  * FOCUS and GROWTH programmes implemented
  * Expansion course continued with Central acquisition
  * Ordinary dividend for 2009 to remain unchanged at EUR 0.32 per share



In the 2009 financial year, TAKKT Group generated turnover of EUR 731.5 (2008:
932.1) million. This corresponds to a 21.5 percent fall compared to the previous
year. The acquisition of Central and the stronger US dollar on average
throughout the year had a compensating effect. Adjusted for these effects, the
drop amounted to 26.2 percent. While the gross profit margin rose
anti-cyclically to 42.0 (41.4) percent, the operational result saw a sharp
decrease. EBITDA (earnings before interest, tax, depreciation and amortisation)
fell to EUR 68.7 (133.1) million. The reasons for the drop were lower
advertising efficiency and lower capacity utilisation in all divisions, in
addition to weaker turnover. The EBITDA margin sank to 9.4 (14.3) percent.
Adjusted for one-off expenditure totalling EUR 5.2 million in connection with
the FOCUS programme, the Group posted an EBITDA margin of 10.1 percent.
"Ultimately, given the significant fall in turnover, we can be satisfied with
our adjusted EBITDA margin of around ten percent," said CFO Dr Florian Funck.



Profit after tax fell to EUR 27.8 (75.1) million. There were several reasons for
the decline, besides the weak overall business development: firstly, the
increase in depreciation and amortisation to EUR 19.2 (15.8) million, primarily
due to additional intangible assets acquired as part of the Central takeover.
Secondly, increased finance expenses compared to the previous year due to the
higher level of debt. Thirdly, the higher tax ratio of 34.3 (32.4) percent,
which largely is the result of deferred taxes on loss carry-forwards.



Good cash flow - sound balance sheet

Despite the substantial fall in turnover, TAKKT Group generated a relatively
good cash flow of EUR 56.1 (97.1) million. The cash flow margin as a percentage
of Group turnover was 7.7 (10.4) percent. Through the reduction in current
assets and lower routine capital expenditure, free cash flow, which is for
acquisitions, borrowings repayments and shareholder dividends, was still in the
crisis year 2009 EUR 66.4 (69.9) million. TAKKT's balance sheet structure
remains sound: after the share buy-back, the Central acquisition and the
dividend payment, the equity ratio is 44.5 (61.1) percent.



Rapid and comprehensive reaction to the crisis

TAKKT management responded to the fall in turnover by launching the FOCUS and
GROWTH programmes. The programmes reviewed the value contribution and potential
of all the Group's activities, and pooled and prioritised the growth initiatives
in the Group.



As a result of FOCUS the Topdeq activities in the USA were discontinued as of
the year-end and the streamlining of the Plant Equipment Group's warehouse
structure from four to two sites was initiated. In Europe for example, the
company's production capacities were adjusted, and the warehouse nearby was
closed. Overall, the restructuring resulted in one-off expenses of EUR 5.2
million. All measures were initiated respectively completed in 2009. The
structural changes to the Group are also reflected by the two new divisions
TAKKT EUROPE and TAKKT AMERICA valid since the beginning of the 2010 financial
year.



"As a result of FOCUS we are expecting annual savings of more than three million
euros from 2010 onwards," commented Zimmermann on the earnings effect of the
measures taken in 2009.



In October 2009, the e-commerce company Certeo started operations in Germany as
part of the GROWTH initiatives. Certeo is TAKKT Group's first pure internet
brand in Europe and sells business equipment to corporate customers. Expanding
the e-commerce activities will also play an important role in the Group's
strategic focus. Furthermore, Hubert's European activities were extended to
France after the successful start in Germany. KAISER + KRAFT additionally
launched a new company in Russia.



Turnover decrease in all divisions

KAISER + KRAFT EUROPA remains highly profitable

The largest division in TAKKT Group, KAISER + KRAFT EUROPA, was severely hit by
the recession, reporting a fall in turnover of 29.7 percent to EUR 379.2 (539.3)
million. The decline rates began to slow down in the second half of the year.
EBITDA fell by 48.4 percent to EUR 56.6 (109.8) million. At 14.9 (20.4) percent,
the EBITDA margin was well below the previous year's figure. Despite this
significant fall, KAISER + KRAFT EUROPA maintained its operating margin at the
upper end of the TAKKT target corridor of 12 to 15 percent, thereby continuing
to be the most profitable division. Adjusted for the one-off costs of the FOCUS
programme of EUR 2.4 million, the margin was at 15.6 percent.



Topdeq: withdrawal from US business

Business in the Topdeq division was negatively impacted both by the economic
decline and the withdrawal from the USA in the fourth quarter 2009 as determined
by the FOCUS programme.



Turnover for the year fell to EUR 57.3 (82.7) million. Adjusted for currency
effects, this is equivalent to a drop of 31.4 percent. For the first time since
2004, the operational result was negative at EUR minus 1.5 million, following a
positive figure of EUR 6.1 million in the previous year. In contrast, the Topdeq
division's European activities still contributed positively to the operational
result. However, the target of achieving a double-digit operational margin,
originally set for 2010, will thus only be possible at a later date.



K + K America recovers towards year-end

All three K + K America groups suffered from turnover reduction in 2009. There
were, however, considerable differences regarding the extent of this decrease
within the division. While the Plant Equipment Group (C&H, Avenue) suffered
downward trends comparable to those seen in Europe, the Office Equipment Group
(NBF group) and in particular the Specialties Group (Hubert, Central) - whose
customers are largely from the service sector - fared relatively well. The
latter even succeeded in generating modestly positive organic turnover growth in
the fourth quarter of 2009.



All in all, turnover fell by 9.6 percent to USD 411.2 (454.9) million. Adjusted
for Central, the fall amounted to 20.0 percent. Translated into the reporting
currency of euros, turnover came to EUR 295.6 (310.9) million, a decline of 4.9
percent. EBITDA fell to EUR 21.1 (25.5) million, and the EBITDA margin
accordingly was at 7.1 (8.2) percent. In addition to economic factors, start-up
losses at the new Hubert companies in Germany and France also depressed
earnings, as did one-off expenses for FOCUS of EUR 1.6 million.



Unchanged ordinary dividend of EUR 0.32

High cash flow generation is a key strength of TAKKT's business model. At the
Annual General Meeting for the financial year 2009 on 04 May 2010, the
Management and Supervisory Boards will therefore propose an unchanged ordinary
dividend of 32 cents per share. Due to the year's weak business development and
the balance sheet structure, there will be no special dividend for 2009.



Outlook for 2010: return to growth

In view of the improvement in economic conditions and the mildly positive
signals from the first weeks of the current financial year, the Management Board
anticipates a return to the growth course in 2010. Although most groups are
still expecting negative growth for the first quarter, turnover development at
Group level should become positive from the second quarter onwards. Provided
that the global economy does not experience serious setbacks, corporate
management is expecting top-line turnover growth of up to two percent for the
full year. Based on the expected business recovery and efficiency gains
resulting from the FOCUS programme, the operational margin is expected to
increase by at least one percentage point to more than eleven percent.



Changes in TAKKT Supervisory Board

Michael Klein has notified the company in writing, that he will be resigning as
member of TAKKT AG's Supervisory Board with effect from the end of the next
Annual General Meeting. A decision on his successor as well as a successor for
Dr Eckhard Cordes will also be taken at the Annual General Meeting.





IFRS figures for TAKKT Group for the 2009 financial year

(in EUR million)



+---------------------------------------------------------+-----+-----+------+
|                                                         |     |     |Change|
|                                                         | 2009| 2008|  in %|
+---------------------------------------------------------+-----+-----+------+
|TAKKT Group                                              |     |     |      |
|                                                         |731.5|932.1| -21.5|
|turnover                                                 |     |     |      |
|                                                         |     |     |      |
|organic growth                                           |     |     | -26.2|
|                                                         |     |     |      |
|  KAISER + KRAFT EUROPA                                  |379.2|539.3| -29.7|
|                                                         |     |     |      |
|  Topdeq                                                 | 57.3| 82.7| -30.7|
|                                                         |     |     |      |
|  K + K America (EUR)                                    |295.6|310.9|  -4.9|
|                                                         |     |     |      |
|  K + K America (USD)                                    |411.2|454.9|  -9.6|
+---------------------------------------------------------+-----+-----+------+
|EBITDA                                                   | 68.7|133.1| -48.4|
|                                                         |     |     |      |
|EBITDA margin                                            |  9.4| 14.3|      |
+---------------------------------------------------------+-----+-----+------+
|EBIT                                                     | 49.4|117.3| -57.8|
|                                                         |     |     |      |
|EBIT margin                                              |  6.8| 12.6|      |
+---------------------------------------------------------+-----+-----+------+
|Profit before tax                                        | 42.4|111.0| -61.8|
|                                                         |     |     |      |
|Pre-tax profit margin                                    |  5.8| 11.9|      |
+---------------------------------------------------------+-----+-----+------+
|Cash flow                                                | 56.1| 97.1| -42.2|
|                                                         |     |     |      |
|Cash flow margin                                         |  7.7| 10.4|      |
+---------------------------------------------------------+-----+-----+------+
|                                                         |     |     |      |
+---------------------------------------------------------+-----+-----+------+
|Capital expenditure (incl. acquisitions and finance      | 60.1| 27.9| 115.4|
|leases)                                                  |     |     |      |
+---------------------------------------------------------+-----+-----+------+
|Cash flow per share in EUR                               | 0.84| 1.33| -36.8|
|                                                         |     |     |      |
|Earnings per share in EUR                                | 0.41| 1.01| -59.4|
|                                                         |     |     |      |
|Dividend per share in EUR                                | 0.32|0.80*| -60.0|
+---------------------------------------------------------+-----+-----+------+
|Non-current assets                                       |386.8|353.9|   9.3|
|                                                         |     |     |      |
|in % of total assets                                     | 72.1| 66.7|      |
+---------------------------------------------------------+-----+-----+------+
|Shareholders' equity                                     |238.8|324.4| -26.4|
|                                                         |     |     |      |
|in % of total assets                                     | 44.5| 61.1|      |
+---------------------------------------------------------+-----+-----+------+
|Net borrowings                                           |180.8| 79.9| 126.3|
+---------------------------------------------------------+-----+-----+------+
|Employees (full-time equivalents) at 31.12.              |1,768|1,960|  -9.8|
+---------------------------------------------------------+-----+-----+------+


*) thereof special dividend of EUR 0.48



The  figures for financial years 2008 and 2009 were prepared on the basis of the
new  IFRS regulations  on catalogue  accounting, which  are applicable  from 01
January 2009.



Financial calendar

The figures for the first quarter of 2010 will be published on 29 April 2010.
The Annual General Meeting will be held at the Forum Ludwigsburg on 04 May 2010.



Short profile of TAKKT AG

TAKKT is the leading B2B mail order 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 some 160,000
items for the areas of business and warehouse equipment, classical and
design-oriented office furniture and accessories, and supplies for retailers,
the food service industry and the hotel market.



TAKKT Group employs some 1,800 staff, has approximately three million customers
worldwide and distributes around 55 million catalogues and mailings per year.



TAKKT AG is listed on the SDAX and was admitted to Deutsche Boerse's Prime
Standard on 01 January 2003.



Contacts:

Dr Felix A. Zimmermann, CEO                         Tel. +49 711 3465-8201

Dr Florian Funck, CFO                                     Tel. +49 711 3465-8207



Email: [email protected]



[HUG#1395759]



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Takkt AG
Neckartaltstr. 155 Stuttgart null

ISIN: DE0007446007;

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