TAKKT AG: TAKKT records strong cash flow in the first half of the year despite challenging economic conditions

TAKKT records strong cash flow in the first half of the year despite challenging economic conditions
 

• Significant free cash flow increase to EUR 31.4 million 
• Organic sales slightly down year-on-year at minus 2.5 percent, as expected
• EBITDA at EUR 57.0 million
• EBITDA expectation narrowed to EUR 120 to 130 million
   

Stuttgart, Germany, July 27, 2023. The economic environment in Europe and North America was challenging in the first half of the year. As expected, customer demand remained subdued in the second quarter due to continued weak economic momentum. Organic growth in the second quarter was minus 1.8 percent and was burdened by the phase-out of the Certeo business by around one percentage point. In the first half of the year, TAKKT generated sales of EUR 641.2 (657.0) million, with organic growth of minus 2.5 percent. “We planned a cautious first half-year and were correct in this forecast. Despite the difficult environment, we see positive developments, to which our growth initiatives also contribute. In the FoodService Division, we are growing particularly strongly due to our new positioning. In Germany, we see good sales contributions from cross-selling, holding our own in a weak environment,” says CEO Maria Zesch.

At 39.7 (39.9) percent, the gross profit margin in the first half of the year was close to the target of 40 percent. Thanks to positive effects from further price adjustments and lower transport costs, TAKKT was able to almost completely offset the negative structural effect and the weaker development of the gross profit margin in the FoodService business. EBITDA came to EUR 57.0 (67.3) million in the first half of the year, the EBITDA margin was 8.9 (10.2) percent. In view of the subdued sales development, TAKKT was cautious with regard to expenses and new hires. Accordingly, marketing costs were lower than in the previous year, while costs were increased by the further implementation of the transformation and inflation-related effects. One-time expenses were just under EUR 3 million and were attributable to the phase-out of Certeo’s activities and the FoodService integration. In the previous year, one-time expenses were at a very similar level. Despite the difficult conditions, TAKKT generated strong free TAKKT cash flow in the first half of the year. “Our consistent cash management is paying off. We were also able to achieve improvements in the management of net working capital in the second quarter and, in particular, noticeably reduce our inventories. As a result, we were able to increase free TAKKT cash flow for the first six months of the year to EUR 31.4 (minus 1.3) million,” says CFO Lars Bolscho.

TAKKT made further progress in implementing its strategy with the three pillars of Growth, OneTAKKT and Caring. The focus in the first half of the year was on the integration of the FoodService division, where the customer-related functions of Hubert and Central were bundled into one organization, thus achieving positive cross-selling effects, among other things. The consolidation of warehouse locations will lead to additional synergies in the FoodService division in the medium term. As part of the brand harmonization, TAKKT will relaunch the kaiserkraft brand in the Industrial & Packaging division with a new branding at the beginning of August and offer customers a wide range of warehouse and business equipment as well as packaging products. In July, TAKKT acquired a minority stake in Nuwo. The start-up uses a leasing model to help customers equip attractive workplaces, especially in the home office and is thus a good example for shaping new worlds of work.

The economic environment continues to be characterized by great uncertainty. “We have a clear strategy with Growth, OneTAKKT and Caring, which we are continuing to pursue. We are well on track with our growth initiatives. Our big advantage is our broad positioning along different customer segments and regions,” says CEO Maria Zesch. In the current environment, TAKKT intends to take advantage of growth opportunities while maintaining disciplined cost management. For the second half of the year, the Group expects demand to pick up and organic growth to improve slightly compared to the weak previous year.

TAKKT will continue to give high priority to profitability in the second half of the year. “With the exception of our growth initiatives, we are very restrictive in our spending. And we continue to work on improving our gross profit margin and cash management. For the second half of the year, we expect an increase in earnings and profitability compared to the weak previous year based on the assumed slight sales growth,” says CFO Lars Bolscho. For 2023 as a whole, TAKKT expects a stable to slightly negative organic sales development. EBITDA is expected to be in the range of EUR 120 to 130 million (previously EUR 120 to 140 million) and free TAKKT cash flow is expected to increase significantly.
 

Earnings call: July 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 nine months on October 25, 2023.
IFRS figures for the TAKKT Group as of the end of H1 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
Benjamin Bühler    phone +49 711 3465-8223
Email: investor@takkt.de