TAKKT increases gross profit margin and free cash flow in first quarter

• Focus on cash generation leads to strong increase in free TAKKT cash flow to EUR 17.8 (10.2) million
• Improvement in gross profit margin to 40.0 (39.7) percent
• Sales development (minus 2.0 percent) in line with expectations in a challenging economic environment
• EBITDA slightly below previous year at EUR 30.2 (32.7) million

Stuttgart, Germany, April 27, 2023. Economic conditions in Europe and North America continued to decline at the beginning of the year, resulting in weaker demand from B2B customers. Following strong organic growth in the previous year, TAKKT generated sales of EUR 321.8 (328.4) million in the first quarter of 2023, down 2.0 percent compared to the first three months of 2022. Adjusted for currency effects, sales were 3.3 percent below the previous year’s level. “The current market environment is volatile and regionally diverse. We continue to see good growth in the FoodService division, as well as in Scandinavia and Eastern Europe, while in other markets our customers are acting more restrained. We planned a cautious start to the new year and were right with this forecast,” says CEO Maria Zesch, assessing the development.

In the current environment, TAKKT continues to place a high priority on consistent inflation management and improving the gross profit margin. “In the first quarter, we improved our purchasing conditions for products, transport costs, discounting and pricing. The higher margin in the Industrial & Packaging and Office Furniture & Displays divisions more than compensated for the negative structural effect and the decline in the FoodService division. Overall, we were able to increase the gross profit margin to 40.0 (39.7) percent. This brings us back to our target of 40 percent for the Group,” says CFO Lars Bolscho. TAKKT has adjusted marketing costs to the weaker environment and reduced them compared to the previous year. Personnel expenses and other costs increased slightly, as expected, due to inflation and the further implementation of the integrated positioning. The Group generated EBITDA of EUR 30.2 (32.7) million in the first quarter. One-time expenses for the implementation of the transformation amounted to less than EUR 1 million in the first quarter, compared with just under EUR 2 million in the previous year. The EBITDA margin in the reporting period was 9.4 (10.0) percent.

“In addition to managing costs, our main focus in the current fiscal year is on consistent cash flow management. After the strong increase in net working capital last year, we were able to significantly increase free TAKKT cash flow by reducing inventories,” Lars Bolscho continued. Cash inflow increased significantly to EUR 17.8 (10.2) million in the first quarter.

After the expected subdued start to the new financial year, TAKKT anticipates an improvement in the second half of the year. “The economic environment remains very volatile. Our great advantage is our broad positioning along different customer segments and regions. We continue to expect demand to pick up in the second half of the year. In addition, the integration of the divisions gives us more opportunities for cross-selling, and our pricing and e-commerce initiatives offer further growth potential,” says Maria Zesch. As part of the implementation of the strategy and the focus on fewer brands, TAKKT will not continue the Certeo sales brand. The business had failed to meet our growth and earnings expectations. It most recently had a sales volume of around EUR 20 million and was not profitable. For the full year, the Group continues to expect stable organic sales development, an improvement in the gross profit margin and EBITDA of between EUR 120 and 140 million. Free TAKKT cash flow is expected to increase significantly.

Earnings call: April 27, 2023 at 2:00 p.m. (CEST).

Please register in advance to participate in the Earnings Call. You can find the registration link at: www.takkt.de/event

Financial calendar
TAKKT will publish figures for the first half of the year on July 27, 2023.

IFRS figures for the TAKKT Group as of the end of the first quarter 2023
(in EUR million)

 
About TAKKT AG

TAKKT AG is the leading omnichannel distributor for business equipment in Europe and North America. The Group is represented in more than 25 countries with its Industrial & Packaging, Office Furniture & Displays and FoodService divisions. The product range of the subsidiaries comprises more than 700,000 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.

Contacts

Michael Loch    phone +49 711 3465-8222
Benjamin Bühler    phone +49 711 3465-8223
Email: investor@takkt.de