Takkt Ag · XETR:TTK
Takkt — German MidCap Investor Day 2006
63 slides from Takkt's conference presentation, Jun 6, 2006
Slide 1: German MidCap Investor Day
German MidCap Investor Day Dr Florian Funck, CFO 6 June 2006
Slide 2: Contents
Contents z TAKKT at a glance z industry attractiveness and strategic success factors z cost structures and financial highlights 2005 / 2006 z NBF acquisition z outlook z appendix
Slide 3: TAKKT at a glance
TAKKTAG BUSINESS EQUIPMENT SOLUTIONS TAKKT at a glance
Slide 4: TAKKT: business overview
TAKKT: business overview business z sales channel: B2B mail order activity z products: durables/specialties z regional diversification: more than 25 countries geographic balance z turnover by region: ~ 60% Europe/ ~ 40% North America z number of customers: > 2m key facts z advertising media sent out
Slide 5: TAKKT: broad product range based on four pillars
TAKKT: broad product range based on four pillars business office occupational foodservice equipment equipment safety equipment
Slide 6: Industry attractiveness and strategic success factors
industry attractiveness and strategic success factors
Slide 7: TAKKT competes in a very attractive industry
TAKKT: competes in a very attractive industry Low – high entry threat of barriers via new Low – start-up no customer losses entrants >1% of turnover, prices insensitive power of rivalry power of suppliers within industry customers Low – fragmented Low – supplier Low – threat of between mail order st
Slide 8: TAKKT: long-term growth path
TAKKT: long-term growth path TURNOVER TAKKT GROUP Ò 1985 – 2005 in million Euro 773 800 1985 – 2005 700 z growth: CAGR +12% 600 500 z EBITDA margin: 10-12% 400 300 other 200 North America 100 80 Rest of Europe Germany 1985 1993 2005 Î growth: ~ ½ organic, ~ ½ acquisitions
Slide 9: TAKKT: strategic success factors
TAKKT: strategic success factors clear business focus clear clear strategy for TAKKT value-added for growth customer clear organisational structure
Slide 10: Success factors: business model and market overview
TAKKT’s success factors: business model and market overview product products TAKKT z price insensitive durables Manutan z ∅ order value ~ € 375 Schäfer Shop Electro- z broad product range W.W.Grainger components specialties MSC Industrial Hagemeyer sales channel consum- Buhrmann z pure mail order ab
Slide 11: Success factors: clear value-added for customer
TAKKT’s success factors: clear value-added for customer z wide product range one-stop-shop z pre-selection operational z outstanding service quality at every step of excellence value chain lowest total cost of z low information costs procurement z low transaction costs international z customers can
Slide 12: Success factors: clear organisational structure
TAKKT’s success factors: clear organisational structure z knowledge z synergies / economies of scale z procurement / advertising z logistics z customer database z e-commerce z distribution companies Î allows centralised management and market proximity
Slide 13: Success factors: clear strategy for growth
TAKKT’s success factors: clear strategy for growth Topdeq 1994 Gerdmans / Conney 1998 1. acquisitions (platform) Hubert 2000 NBF 2006 e.g. Topdeq USA 2000 2. new foundations (roll out) e.g. KAISER + KRAFT Japan 2002 e.g. KWESTO Romania 2005 3. increase of advertising media advertising
Slide 14: Success factors: clear growth potential for TAKKT
TAKKT’s success factors: clear growth potential for TAKKT product other V V V foodservice equipment/spec. V safety V design-oriented in terms office V of sales equipment office equipment business equipment region Europe North America Asia Î objective: diversified product portfolio via duplication of
Slide 15: Cost structures and financial highlights 2005 / 2006
cost structures and financial highlights 2005 / 2006
Slide 16: Cost structures: stable on average
Cost structures: stable on average Business model generates high free cash flow stable gross margin stable margins high cost of goods cash flow cat. low ord. ~10% CAPEX turnover high free depr. pers. ~1.5% cash flow ~10% GM ~ 40% others profits profits ~10% EBITDA >10%
Slide 17: 2005: highlights
2005: highlights z turnover growth by 6.3 percent to EUR 773.2 (727.6) million z currency adjusted turnover growth by 5.9 percent – all divisions contributed z profitability above long-term target corridor despite start-ups, EBITDA margin up from 12.0 to 12.7 percent z EPS increase by 54.5 percent t
Slide 18: Q1 2006: highlights
QI 2006: highlights z turnover growth by 30.0 percent to EUR 247.6 (190.5) million z currency adjusted turnover growth by 24.9 percent – all divisions contributed z EBITDA margin up from 13.7 to 14.0 percent; excluding NBF at 15.0 percent z EPS increase by 35.0 percent to 25 cent z cash flow up to E
Slide 19: TAKKT share: price advance reflects potential
TAKKT share: price advance reflects potential SHARE PRICE DEVELOPMENT Ò in Euro z Prime Standard since 52 week comparison 01/01/2003 z 72.9 million shares 13.5 z market capitalisation: 12.0 ~ Euro 900m z shareholder structure: 10.5 - free float: 27.3% - Franz Haniel & Cie. - - GmbH: 72.7% 9.0 7.5
Slide 20: NBF acquisition
TAKKTAG BUSINESS EQUIPMENT SOLUTIONS NBF acquisition
Slide 21: NBF: logical development of TAKKT portfolio
NBF: logical development of TAKKT portfolio product other specialties V design-oriented office equipment V in terms of sales office equipment NBF business equipment region Europe North America Asia
Slide 22: NBF: business overview
NBF: business overview z US market leader in B2B mail order for office equipment z headquarters in Milwaukee, Wisconsin z founded 1975 by George (66) and Julie Mosher (61) z five brands z turnover 2004 / 2005e: USD 114m / 125m z EBITA margin 2004 / 2005e: 4 / 5% z product range: > 11,000 z number of
Slide 23: US office furniture market
US office furniture market z size of B2B office furniture market in USA: > USD 10 billion z market growth 1990 – 2005: 3% CAGR z organic growth of NBF 1990 – 2005e: > 5% CAGR z US depression 2001 – 2003 reflected in development of segment and company Development of B2B office furniture market in US
Slide 24: NBF: purchase price allocation (indication)
NBF: purchase price allocation (indication) z treatment under US tax laws taxable intangibles USD 78.6m depreciation period 15 years annual depreciation USD 5.2m z identifiable intangible assets (IFRS 3) customer base + list catalogues website, databases, domain names trade names z ann
Slide 25: Outlook
TAKKTAG BUSINESS EQUIPMENT SOLUTIONS outlook
Slide 26: Outlook: basic economic conditions
Outlook: basic economic conditions GDP growth in % 2005 2006 2007 Europe 1.3 1.8 1.8 Germany 0.6 1.5 1.0 USA 3.6 3.3 2.5 z economy in Europe only to improve slightly z economy in Germany positively impacted by increased domestic demand in run up to planned VAT increase z forecasted decline in 2007 i
Slide 27: Outlook 2006: initiatives for growth
Outlook 2006: initiatives for growth NBF 2006 1. acquisitions (platform) … ? KAISER + KRAFT China 2006 2. new foundations (roll out) Gaerner France 2006 Topdeq Austria 2006 3. increase of advertising media advertising media 50 in m circulation and broader product range (market penetration)
Slide 28: Outlook 2006: TAKKT key figures
Outlook 2006: TAKKT key figures z currency adjusted organic growth of at least 4 to 5 percent z turnover increase incl. NBF by at least 18 percent z start-ups and NBF will affect profitability z gross profit margin remains above 40 percent z EBITDA margin in upper range of target corridor of 10 to 1
Slide 29: That's why invest in TAKKT
That’s why invest in TAKKT z product diversification balanced z independence from customers and suppliers risk portfolio z regional diversification z duplicable system business sustainable z entering new markets / product groups growth potential z expansion / penetration of established markets z sta
Slide 30: Appendix
TAKKTAG BUSINESS EQUIPMENT SOLUTIONS appendix
Slide 31: Reporting: EBITDA as future key figure for profitability
Reporting: EBITDA as future key figure for profitability z change from EBITA to EBITDA due to IFRS 3 z goodwill accounted for in the course of a business combination now has to be allocated to intangible assets as far as possible and depreciated (e.g. customer lists) z only to be applied to new acqu
Slide 32: Q1 2006
TAKKTAG BUSINESS EQUIPMENT SOLUTIONS QI 2006
Slide 33: Q1 turnover: currency adjusted organic growth by 24.9 percent
QI turnover: currency adjusted organic growth by 24.9 percent TURNOVER TAKKT GROUP Ò QI 2004 – 2006 in million Euro 247.6 200 184.4 190.5 150 100 50 QI 04 QI 05 QI 06 3.3% 30.0% growth
Slide 34: Q1 EBITDA: margin at 15.0 percent excluding NBF
QI EBITDA: margin at 15.0 percent excluding NBF EBITDA Ò QI 2004 – 2006 in million Euro 40 34.6 30 24.6 26.1 20 10 QI 04 QI 05 QI 06 13.3% 13.7% 14.0% margin
Slide 35: Q1 cash flow: high level proves profitability
QI cash flow: high level proves profitability CASH FLOW Ò QI 2004 – 2006 in million Euro 22.8 20 16.6 17.4 15 10 5 QI 04 QI 05 pro-forma QI 06 9.0% 9.1% 9.2% margin
Slide 36: Q1 profit before tax: strong increase in profitability
QI profit before tax: strong increase in profitability PROFIT BEFORE TAX Ò QI 2004 – 2006 in million Euro 28.0 25 21.4 20 15 10.2* 10 5 QI 04 QI 05 QI 06 5.5% 11.2% 11.3% margin * before application of IFRS 3
Slide 37: Q1 balance sheet: effect of NBF consolidation visible
QI balance sheet: effect of NBF consolidation visible ASSETS Ò in million Euro on on % % 31/03/06 31/12/05 non-current assets 371.8 68.3 386.7 67.9 property, plant and equipment 69.2 11.9 68.0 13.6 goodwill 263.1 45.2 227.5 45.5 other intangible assets 35.2 6.0 9.3 1.9 other financial assets 0.4 0.1
Slide 38: Q1 balance sheet: healthy financing structure
QI balance sheet: healthy financing structure EQUITY AND LIABILITIES Ò in million Euro on on % % 31/03/06 31/12/05 total equity shareholders’ equity 247.0 42.5 230.6 46.1 minority interest 2.7 0.5 2.4 0.5 borrowings 215.0 37.0 162.2 32.5 provisions 24.1 4.1 22.9 4.6 trade payables 36.6 6.3 28.2 5.6
Slide 39: KAISER + KRAFT EUROPA: Q1 development
KAISER + KRAFT EUROPA: QI development TURNOVER EBITDA Ò QI 2004 – 2006 Ò QI 2004 – 2006 in million Euro in million Euro 125 116.3 25 24.0 98.3 100.8 100 20 18.6 18.6 75 15 50 10 25 5 QI 04 QI 05 QI 06 QI 04 QI 05 QI 06 margin 18.9% 18.5% 20.6%
Slide 40: Topdeq: Q1 development
Topdeq: QI development TURNOVER EBITDA Ò QI 2004 – 2006 Ò QI 2004 – 2006 in million Euro in million Euro 23.3 21.1 18.8 1.6 20 1.4 1.5 15 1.0 10 0.7 0.5 5 QI 04 QI 05 QI 06 QI 04 QI 05 QI 06 margin 3.7% 6.6% 6.9%
Slide 41: K + K America: Q1 development
K + K America: QI development TURNOVER EBITDA Ò QI 2004 – 2006 Ò QI 2004 – 2006 in million Euro in million Euro 108.0 100 11.3 10 75 67.3 68.6 8.0 7.2 50 5 25 QI 04 QI 05 QI 06 QI 04 QI 05 QI 06 margin 10.7% 11.7% 10.5%
Slide 42: Key figures 2005
TAKKTAG BUSINESS EQUIPMENT SOLUTIONS key figures 2005
Slide 43: NBF: theoretical impact on equity and liabilities of TAKKT in 2005
NBF: theoretical impact on equity and liabilities of TAKKT in 2005 EQUITY AND LIABILITIES Ò in million Euro 31/12/2005 31/12/04 actual NBF pro forma actual total equity 233.0 0.0 233.0 184.0 borrowings 162.2 76.5 238.7 186.3 other liabilities 104.7 3.6 108.3 87.5 total equity and liabilities 499.9 8
Slide 44: Turnover: currency adjusted organic growth by 5.9 percent
Turnover: currency adjusted organic growth by 5.9 percent TURNOVER TAKKT GROUP Ò 2001 – 2005 in million Euro 824.1 800 783.7 773.2 713.9 727.6 700 600 500 400 300 200 100 2001 2002 2003 2004 2005 8.0% -4.9% -8.9% 1.9% 6.3% change
Slide 45: Turnover: increase due to higher number of orders and AOV
Turnover: increase due to higher number of orders and AOV NO. OF ORDERS AOV Ò 2004 – 2005 Ò 2004 – 2005 in thousand in Euro 2,008* 2,035 2,000 400 356* 375 1,500 300 1,000 200 500 100 2004 2005 2004 2005 1.3% increase 5.3% increase * technical change in counting method
Slide 46: Turnover: diversified portfolio
Turnover: diversified portfolio TURNOVER by division TURNOVER by region Ò 2005 Ò 2005 North America KAISER + KRAFT 39.5% EUROPA 51.9% Germany Topdeq 23.8% 10.6% Other 0.3% K + K America 37.5% Rest of Europe 36.4%
Slide 47: Gross profit: increase of margin to 41.4 percent
Gross profit: increase of margin to 41.4 percent GROSS PROFIT MARGIN Ò 2001 – 2005 in % in million Euro 800 40 600 30 400 20 200 gross profit margin gross profit turnover 2001 2002 2003 2004 2005
Slide 48: EBITDA: increased margin despite new foundations
EBITDA: increased margin despite new foundations EBITDA Ò 2001 – 2005 in million Euro 98.4 100 86.6 85.7 87.2 80.1 80 60 40 20 2001 2002 2003 2004 2005 10.5% 10.9% 11.2% 12.0% 12.7% margin
Slide 49: Profit before tax: significant increase also due to IFRS 3
Profit before tax: significant increase also due to IFRS 3 PROFIT BEFORE TAX Ò 2001 – 2005 in million Euro 78.7 80 60 51.5 39.0 40.6 40 35.5 20 2001 2002 2003 2004 2005 4.3% 5.0% 5.7% 7.1% 10.2% margin
Slide 50: Cash flow: high level proves profitability
Cash flow: high level proves profitability CASH FLOW Ò 2001 – 2005 in million Euro 70 65.5 60.5 60 53.3 50.3 51.8 50 40 30 20 deferred tax 10 depreciation profit 2001 2002 2003 2004 2005 6.1% 6.8% 7.3% 8.3% 8.5% margin
Slide 51: Capital expenditure: as planned slightly higher and within target range
Capital expenditure: as planned slightly higher and within target range CAPITAL EXPENDITURE Ò 2001 – 2005 in million Euro 25 24.0 20 15 9.8 8.9 10 8.6 8.6 5 capital expenditure incl. finance leasing 2001 2002 2003 2004 2005 2.9% 1.1% 1.4% 1.2% 1.2% margin
Slide 52: Balance sheet: organic growth and currency effects extend total assets
Balance sheet: organic growth and currency effects extend total assets ASSETS Ò in million Euro on on % % 31/12/05 31/12/04 non-current assets 371.8 68.3 386.7 67.9 property, plant and equipment 68.0 13.6 68.0 14.8 goodwill 227.5 45.5 211.4 46.2 other intangible assets 9.3 1.9 6.3 1.4 other 0.4 0.1
Slide 53: Balance sheet: strengthened equity ratio of 46.1 percent
Balance sheet: strengthened equity ratio* of 46.1 percent EQUITY AND LIABILITIES Ò in million Euro on on % % 31/12/05 31/12/04 total equity shareholders’ equity 230.6 46.1 181.0 39.6 minority interest 2.4 0.5 3.0 0.6 pension provisions 9.9 2.0 9.3 2.0 other provisions 12.9 2.6 10.6 2.3 borrowings 16
Slide 54: KAISER + KRAFT EUROPA: main contributor to turnover, high profitability
KAISER + KRAFT EUROPA: main contributor to turnover, high profitability TURNOVER EBITA Ò 2001 – 2005 Ò 2001 – 2005 in million Euro in million Euro 401.3 400 383.3 367.2 357.9 379.5 65.6 61.2 60 53.2 55.1 56.0 300 40 200 100 20 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 margin 13.9% 15.0% 15.7
Slide 55: Topdeq: successful redirection brings turnaround
Topdeq: successful redirection brings turnaround with double-digit growth TURNOVER EBITA Ò 2001 – 2005 Ò 2001 – 2005 in million Euro in million Euro 83.0 82.1 2 79.3 80 74.6 74.6 1.0 1 60 -0.4 -1.5 -1.2 -2.2 0 40 -1 20 -2 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 margin -0.5% -1.9% -1.6% -2.
Slide 56: K + K America in USD: sound increase in turnover and profitability
K + K America in USD: sound increase in turnover and profitability TURNOVER EBITA Ò 2001 – 2005 Ò 2001 – 2005 in million USD in million USD 400 360.2 40 37.4 339.8 33.4 320.5 318.0 317.7 300 30 26.1 27.3 25.5 200 20 100 10 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 margin 8.1% 8.6% 8.0% 9.8%
Slide 57: K + K America: hardly any currency effects
K + K America: hardly any currency effects TURNOVER EBITA Ò 2001 – 2005 Ò 2001 – 2005 in million Euro in million Euro 400 357.9 337.4 29.1 30.1 30 28.9 26.9 300 281.4 273.5 290.0 22.6 20 200 100 10 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 margin 8.1% 8.6% 8.0% 9.8% 10.4%
Slide 58: Key figures P&L
Key figures P&L Ò in million Euro 2001 2002 2003 2004 2005 turnover 824.1 783.7 713.9 727.6 773.2 EBITDA 86.6 85.7 80.1 87.2 98.4 EBITA 76.4 75.1 70.3 78.2 88.9 EBIT 57.7 57.0 53.9 62.5 88.9 profit before tax 35.5 39.0 40.6 51.5 78.7 profit 19.4 24.5 24.4 33.0 50.4 cash flow 50.3 53.3 51.8 60.5 65.5
Slide 59: Key figures balance sheet / covenants
Key figures balance sheet / covenants Ò in million Euro / other 2001 2002 2003 2004 2005 Ø net borrowings -363.3 -321.7 -260.4 -211.8 -170.2 net borrowings (ye) -353.0 -285.7 -234.3 -182.3 -156.5 CAPEX 24.0 8.6 9.8 8.6 8.9 change in working capital -13.6 -0.3 7.8 2.8 11.5 gearing 2.4 1.9 1.5 1.0 0.7
Slide 60: Key figures personnel
Key figures personnel Ò in thousand Euro / other 2001 2002 2003 2004 2005 employees (full-time Ø) 1,973 1,932 1,888 1,851 1,848 turnover per employee 418 406 378 393 418 personnel costs per empl. 50.8 52.3 50.3 51.7 53.3 cash flow per employee 25.5 27.6 27.5 32.7 35.5 employees (f.-time at 31/12) 1,
Slide 61: Financial calendar 2006
Financial calendar 2006 z 16/01/2006 Cheuvreux German Corporate Conference z 16/02/2006 preliminary results 2005 z 23/03/2006 financial statements press conference + DVFA analyst presentation z March/April road shows Edinburgh, London, Paris z 04/05/2006 interim report for the first quarter 2006 z 3
Slide 62: Contact
Contact TAKKT AG Presselstrasse 12 70191 Stuttgart Corp. Finance/Investor Relations Germany Mr Joachim Eschke Phone: +49 711 34658-0 Phone: +49 711 34658-222 Fax: +49 711 34658-100 Fax: +49 711 34658-104 e-mail: [email protected] e-mail: [email protected] www.takkt.de www.takkt.de
Slide 63: Disclaimer
Disclaimer This presentation contains forward-looking statements. These statements are based on current expectations, estimates and projections of TAKKT management and current available information. They are no guarantees of future performance, involve certain risks and uncertainties that are diffic