Economic crisis weighs heavily on TAKKT Group key figures

7/30/2009, 7:30 AM (Source: GlobeNewswire)


Chart for: TAKKT AG O.N.


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Adjustment of cost structures shows signs of success

Stuttgart, Germany, 30 July 2009. The global economic crisis has
resulted in a sharp decline in turnover for the TAKKT Group in the
first half of 2009. As expected, the 24.3 percent decrease in sales
revenue in comparison to the same period last year also resulted in a
drop in operational profitability. The EBITDA margin fell to 11.0
percent. In view of the current level of demand, the management has
launched the FOCUS and GROWTH programmes, which are designed to
optimise the allocation of resources within the Group and promote
growth initiatives.

Major events in 2009

* Adjusted for currency and acquisition effects, a 29.5 percent
decline in turnover
* Gross profit margin up; EBITDA margin of 11.0 percent
* FOCUS and GROWTH programmes launched
* Acquisition of the leading US mail order group for restaurant

Management opts for cost optimisation and targeted expansion
The TAKKT management has initiated two programmes of measures in
response to the current crisis in demand. Namely FOCUS, which will
review the existing and potential value contribution of the Group's
activities, and GROWTH, which will pool and prioritise growth
initiatives. One of the most significant FOCUS measures is the
decision to close down Topdeq's US-based activities by 31 December
2009. The business has been unable to live up to the long-term
business volume and response rate expectations since it was
established in 2000, also due to the development of the US dollar. As
the Management Board does not expect any change in the underlying
business conditions for Topdeq in the USA in the medium to long term,
the Topdeq division will henceforth focus on its profitable European

Meanwhile in the K + K America division, the number of warehouses for
the Plant Equipment Group will be reduced from four to three, as
improved shipping networks in the USA now mean that deliveries can be
made to the customers almost just as quickly and reliably from three
as from four locations.

In KAISER + KRAFT EUROPA, the Estonian marketing approach is to be
overhauled, in view of the limited size of the market and the current
economic developments in the Baltic States. The customers there will
in future be serviced by a marketing partnership with a local
retailer, rather than by a TAKKT sales company. A similar business
model has been used successfully in Slovenia since 2007.

These measures will be responsible for one-off expenses in the second
half-year 2009 of around EUR 1.5 million in 2009. The Management
Board nevertheless anticipates that these measures will make a
positive earnings contribution of more than EUR 2 million per annum
with effect from 2010.

As part of the GROWTH programme, the KAISER + KRAFT EUROPA division
will use additionally the brand name "certeo" to market office and
business equipment to business customers via the internet only. It is
due to be launched in Germany in October 2009 and plans for a
European roll-out are already in preparation.

Furthermore, business dealings with customers in the service sector
are set to be expanded as part of GROWTH. "We have put our food
service activities on a firm foundation thanks to the acquisition of
Central Restaurant Products (Central) in April and the further
expansion of Hubert within Europe," explained Dr Felix A. Zimmermann,
who succeeded Georg Gayer as CEO on 01 June 2009. Following the
successful launch of Hubert in Germany, the second most important
European market, namely France, will now likewise be represented by
its own sales company there from autumn 2009.

Further initiatives within the FOCUS and GROWTH programmes are
currently being reviewed in detail and the results will be announced
in due course. The Management Board intends to have completed all the
FOCUS initiatives by the end of 2009.

TAKKT Group hit by economic crisis
The TAKKT Group achieved turnover of EUR 358.3 (2008: 473.2) million
in the first half of 2009, representing a year-on-year decline of
24.3 percent. Adjusted for acquisition and currency effects,
consolidated turnover fell by 29.5 percent. Zimmermann commented on
the results of the first six months of the year as follows: "The
significant reluctance of our customers to make investments in the
first half of the year can be interpreted as a sign of the ongoing
uncertainty concerning the economic outlook. At present, we see no
signs of any sustainable economic recovery."

The TAKKT Group's gross profit margin rose to 42.3 (41.9) percent.
Adjusted for acquisition effects, the margin increased to 42.5
percent thanks to improved purchase prices. As expected, EBITDA
(earnings before interest, tax, depreciation and amortisation) fell
as a result of the sharp decrease in business in the first six
months, from EUR 76.3 to 39.5 million, which amounts to an EBITDA
margin of 11.0 (16.1) percent. The drop in profits caused the cash
flow to decrease from EUR 55.3 to 29.6 million, which resulted in a
cash flow margin of 8.3 percent.

Turnover and income in the first and second quarters can only be
compared to a limited extent. "A comparison of the first two quarters
2009 is limited, mainly due to the lower number of working days in
the second quarter as well as a change in the way in which catalogues
are recorded in the balance sheet, which has caused an unequal
distribution of advertising expenses," explained CFO Dr Florian
Funck. Irrespective of this, the measures to adapt capacity
utilisation and costs to the economic situation were further
intensified in the second quarter, which is for example shown by
clear reduction in personnel expenses excluding the acquisition.

KAISER + KRAFT EUROPA records sharp drop in turnover
The turnover of the biggest and most profitable division, KAISER +
KRAFT EUROPA, fell by 33.1 percent to EUR 189.6 (283.2) million in
the first half of the year. EBITDA was down from EUR 63.8 to 32.0
million and the EBITDA margin fell to 16.9 (22.5) percent, primarily
as a result of reduced capacity utilisation and a drop in advertising
efficiency. Turnover developed negatively across the board. The
hardest hit regions were those that had been developing exceptionally
well in previous years, such as Eastern Europe.

Topdeq business remains weak
Topdeq, the specialist for design-oriented office equipment, suffered
a further significant fall in turnover of 30.7 percent down to EUR
29.4 (42.4) million in the first half-year. This downward trend was
most pronounced in the US market. Adjusted for the positive currency
effects of the Swiss franc and the US dollar, the organic drop in
turnover was 32.1 percent. EBITDA fell to EUR -0.9 (2.9) million,
resulting in an EBITDA margin of -3.1 (6.8) percent. Profitability
was stifled both by the decline in advertising efficiency due to the
economic climate and by reduced capacity utilisation of the mail
order infrastructure.

K + K America strengthens its position with Central takeover
Of the three business divisions, K + K America fared the best in the
first half of 2009, with a decline in turnover of 17.9 percent to USD
185.8 (226.2) million. The initial consolidation of Central had a
positive effect on turnover. But even when adjusted for the effects
of this acquisition, the division still developed slightly better
than the rest of the Group with a minus of just 24.3 percent, thanks
to its more diverse customer structure and broader product portfolio.
When translated into the reporting currency of the euro, turnover
fell by a mere 5.6 percent to EUR 139.6 (147.9) million. EBITDA fell
from EUR 14.8 to 12.1 million and the EBITDA margin was 8.7 (10.0)
percent. Central's higher operational profitability had a slightly
positive effect on the division's margin. Disregarding Central, K + K
America had an EBITDA margin of 8.4 percent.

2009 turnover forecast revised - profitability scenarios confirmed
As a result of the business development in the first half-year, the
Management Board has revised the range of its turnover forecast, from
the original 15 to 25 percent drop in organic turnover to a fall of
20 to 25 percent. It has also confirmed the profitability scenario
which foresees that, even with a decline in organic turnover of about
25 percent, operational profitability before extraordinary effects
would only be just under ten percent.

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
15:00 (CEST) on 30 July 2009, during which we will be open to
questions. To take part, please dial the following number: +49 711
9659-9628 (access code: 779134#).

IFRS figures for the TAKKT Group at the end of Q2 2009
in EUR million

Change Change
Q2 2009 Q2 2008 in % H1 2009 H1 2008 in %
Turnover TAKKT Group 171.9 232.7 -26.1 358.3 473.2 -24.3
Organic growth -33.8 -29.5
KAISER + KRAFT 85.7 140.7 -39.1 189.6 283.2 -33,1
Topdeq 13.0 20.1 -35.3 29.4 42.4 -30,7
K + K America (¤) 73.3 72.2 1.5 139.6 147.9 -5,6
K + K America ($) 99.5 112.9 -11.9 185.8 226.2 -17,9
EBITDA 12.6 33.2 -62.0 39.5 76.3 -48.2
EBITDA margin 7.3 14.3 11.0 16.1
EBIT 7.7 29.3 -73.7 30.5 68.8 -55.7
EBIT margin 4.5 12.6 8.5 14.5
Profit before tax 6.1 28.2 -78.4 27.5 65.9 -58.3
Profit before tax 3.5 12.1 7.7 13.9
Cash flow 9.9 24.8 -60.1 29.6 55.3 -46.5
Cash flow margin 5.8 10.7 8.3 11.7

In order to make a valid comparison with the prior year, the prior
year's figures were restated under the revised IFRS regulations for
advertising expenditure.

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 over 160,000 items from the areas business and
warehouse equipment, classical and design-oriented office furniture
and accessories, as well as equipment for retailers, the food service
industry and the hotel market.

The TAKKT Group employs some 2,000 staff, has 3 million customers
worldwide and distributes more than 60 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.

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

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


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