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TAKKT Group continues on growth path

October 27, 2011 - London

Takkt AG /TAKKT Group continues on growth path. Processed and transmitted by Thomson Reuters ONE.The issuer is solely responsible for the content of this announcement.

Earnings remain strong in third quarter

Stuttgart, Germany, 27 October 2011. Despite rising uncertainty surrounding the economic outlook, TAKKT Group continued on its growth path in the third quarter of the current financial year. In the first nine months, the Group's consolidated turnover grew organically by 9.6 percent. There was a disproportionately high increase in profitability, with EBITDA up 29.9 percent on the previous year at EUR 99.1 million. The Management Board is standing by its turnover and earnings forecasts for the full year.

Significant events in the first nine months of 2011

  • Organic turnover growth of 9.6 (2010: 3.1) percent
  • EBITDA margin increases from 13.0 to 15.6 percent
  • Earnings per share rise by 49.1 percent to EUR 0.82 (0.55)
  • Option secured on extension site for European mail order centre
  • Dr Claude Tomaszewski new CFO as of 01 November 2011

Although the economic outlook has become increasingly uncertain since the middle of the year, business at TAKKT has continued to develop positively. In the first nine months of 2011, the Group posted turnover of EUR 633.6 (587.3) million. This corresponds to turnover growth of 7.9 percent. Adjusted for currency effects, consolidated turnover rose by 9.6 percent. As expected, growth slowed down noticeably in the third quarter, not least due to the base effect prompted by the positive turnover development since the second quarter of 2010. However, both of the Group's divisions continued to grow rapidly during the reporting period. "We are profiting from our in-house growth initiatives and this is enabling us to outperform the economy as a whole," explained CEO Dr Felix A. Zimmermann. "Business in Germany remains strong, which is the main factor driving our turnover and earnings." The Management Board confirms the forecast it issued at the end of the first half year. This means the executives still anticipate organic turnover growth of approximately six percent for TAKKT Group in 2011.

At 43.2 percent, the gross profit margin remained clearly above the previous year's figure of 42.6 percent in the first nine months of 2011. Thus far, the Group has successfully compensated for the pressure which is usually placed on the gross profit margin during economic upturns. This was primarily due to very good growth at the high-margin TAKKT EUROPE division.

In addition to the larger gross profit margin, turnover-related higher utilisation of the mail order business infrastructure and increased advertising efficiency led to another marked improvement in operational profitability compared with the same period in the previous year. In the first nine months of the financial year, EBITDA (earnings before interest, tax, depreciation and amortisation) climbed to EUR 99.1 (76.3) million. The EBITDA margin rose to 15.6 (13.0) percent.

TAKKT's cash flow developed positively during the reporting period, increasing 32.5 percent to EUR 70.9 (53.5) million. The cash flow margin came in at 11.2 (9.1) percent.

At the end of the third quarter, the total equity ratio at 52.7 percent came closer to the ceiling of the long-term TAKKT target range of 30 to 60 percent (as against 46.5 percent on 31 December 2010).

Positive trend at TAKKT EUROPE continues
Although business continued to develop disparately at the Business Equipment Group (BEG) and the Office Equipment Group (OEG), the TAKKT EUROPE division once again set the pace at TAKKT Group. Overall, the division generated turnover of EUR 372.8 (332.9) million, equivalent to 58.8 (56.7) percent of the consolidated turnover. The growth rate reached 12.0 percent in the first nine months and 7.1 percent in the third quarter - equivalent to 9.8 percent and 5.4 percent when adjusted for currency effects. This was attributable to very good developments in the BEG's brands KAISER+KRAFT, gaerner, Gerdmans, KWESTO and Certeo, which together posted a double-digit increase in turnover.

Meanwhile, the OEG's repositioning is starting to bear fruit; the average order value is developing very pleasingly. However, the volume of orders lagged clearly behind the previous year's figure, as expected. Turnover at the OEG fell by a low double-digit percentage in the first nine months of the year. Topdeq has decided to change its sales strategy in Austria. As of 2012, this market will be served solely by online marketing. In conjunction with this, the Topdeq site in Schwechat (Vienna) will be closed.

In the first nine months of the financial year, TAKKT EUROPE posted EBITDA of EUR 77.6 (56.6) million. The EBITDA margin therefore rose from 17.0 percent in the previous year to 20.8 percent.

Growth at all groups within TAKKT AMERICA
In the period from January to September, TAKKT AMERICA - which is made up of the Plant Equipment Group (PEG), the Specialties Group (SPG) and the Office Equipment Group (OEG) - increased its turnover to EUR 261.0 (254.5) million. This is equivalent to growth of 2.6 percent. The division thereby contributed 41.2 (43.3) percent to consolidated turnover. Adjusted for currency effects, turnover growth amounted to 9.3 percent in the reporting period and 6.1 percent in the third quarter.

TAKKT AMERICA continued to profit from the extensive diversification of its customer and product portfolio. All three groups recorded substantial currency-adjusted growth in the first nine months. This was due mainly to the higher average order value, but order numbers were also somewhat up on the previous year. However, growth began to lose pace in some units, especially the PEG.

TAKKT AMERICA generated EBITDA of EUR 28.7 (25.3) million in the period under review, giving it an EBITDA margin of 11.0 (9.9) percent. Meanwhile, scheduled start-up losses at the European Hubert companies, and NBF in Canada had a negative impact on earnings.

In August, the SPG's web-only brand went live in the USA. TAKKT has therefore achieved its target of setting up a web-only brand in each of its five groups earlier than planned. The aim was to roll out the new brands by the end of 2011.

Outlook for 2011 confirmed
All around the world, economic forecasts for the rest of 2011 and the following financial year were revised downwards. Although companies' order books are still full at present, the mood in the real economy has darkened. Management Board endorses its forecast released with the half year figures. It therefore expects organic turnover for the TAKKT Group of around six percent for the full year. Provided the turnover target is achieved, Corporate Management still anticipates that the EBITDA margin on Group level can reach the 14.0 percent mark. This would place it in the upper half of the long-term target corridor of twelve to 15 percent.

Management Board complete
On 13 September 2011, the Supervisory Board of TAKKT AG appointed Dr Claude Tomaszewski as the company's new CFO. The 42-year-old graduate in business administration will take up his new post on 01 November 2011. Tomaszewski, currently Group Finance Director at Celesio's British subsidiary AAH Pharmaceuticals, succeeds Dr Florian Funck, who resigned from his position as TAKKT Group's CFO after seven years as of 01 September 2011 to join the Management Board of Franz Haniel & Cie., TAKKT AG's majority shareholder.

Effective 01 October 2011, KAISER+KRAFT EUROPA GmbH fully acquired its long-standing strategic IT partner Uben Unternehmensberatung Enzinger GmbH. The takeover enables TAKKT EUROPE to secure important long term IT expertise for its direct marketing business.

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 27 October 2011, during which we will be open to questions. To take part, please dial the following number: +49 69 201744-295 (access code: 779134#).

IFRS figures for TAKKT Group to the end of Q3 2011
in EUR million

Q3 2011 Q3 2010 Change in % 9M 2011 9M
Change in %
TAKKT Group turnover 216.0 210.5 2.6 633.6 587.3 7.9
Organic growth 5.7 9.6
TAKKT EUROPE 118.3 110.5 7.1 372.8 332.9 12.0
TAKKT AMERICA 97.8 100.0 -2.2 261.0 254.5 2.6
EBITDA 31.3 24.1 29.9 99.1 76.3 29.9
EBITDA margin 14.5 11.4 15.6 13.0
EBIT 27.3 19.1 42.9 86.7 61.4 41.2
EBIT margin 12.6 9.1 13.7 10.5
Profit before tax 24.6 17.1 43.9 80.4 54.7 47.0
Pre-tax profit margin 11.4 8.1 12.7 9.3
TAKKT cash flow 21.5 16.7 28.7 70.9 53.5 32.5
TAKKT cash flow margin 10.0 7.9 11.2 9.1

Company calendar
TAKKT will present the preliminary figures for the financial year 2011 on 16 February 2012.

Short profile of 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 some 160,000 items for the areas of business and warehouse equipment, classic and design-oriented office furniture and accessories, and supplies for retailers, the food service industry and the hotel market.

TAKKT Group employs some 1,900 staff, has around three million customers worldwide and distributes more than 50 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


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