corporate presentation - takkt · the omnichannel commerce segment and one dedicated member for the...
TRANSCRIPT
Corporate presentation
TAKKT AG
Agenda
1. Business model
2. TAKKT 4.0
3. Strategy
4. Key performance figures and indicators
5. Outlook 2019
6. TAKKT dividend policy, share and equity story
February 2020 2
TAKKT AG
Business model
February 2020 3
TAKKT AG
TAKKT is a group of B2B direct marketing specialists
February 2020 4
TAKKT AG
From 2020 onwards, TAKKT will start to change the organization (TAKKT 4.0), focusing on two business models
February 2020 5
TAKKT AG
Web-focused Commerce
D2GNewport
Omnichannel Commerce
NBF
Hubert* Central*
Kaiser+Kraft
ratioform
* Exploring strategic options for Hubert and Central
TAKKT AG
office equipment
NBF
Our business units are product specialists and sell equipment and specialties with an overall average order value of 450 EUR
Kaiser+Kraft
plant, warehouse and
office equipment
packaging solutions
ratioform
restaurant equipment
Central
merchandising and food
equipment
Hubert
Omnichannel Commerce Web-focused Commerce
February 2020 6
Newport
new business models and
start-ups
D2G
displayproducts
TAKKT AG February 2020 7
Fragmented market environment offers good growth potential
TAKKT companies either run an omnichannel or a web-focusedbusiness model
TAKKT companies partially use marketplaces as an additional sales channel
platform economics business models (marketplaces)
omnichannelbusiness models
web-focusedbusiness models70-90% 10-30%
Store-based businesses Distance-selling businesses
TAKKT AG
Our customer types mainly differ between the quality- and service-oriented versus the more price-conscious business customer
Typical customers Characteristics Channels
• Quality- and service-oriented customer with focus on efficiency of procurement process (value add service)
• Frequent and regular demand
• Customer lifetime value (loyal)
• More price-conscious (value for money)
• Less frequent, irregular demand
• Transaction-oriented and less loyal customer
February 2020 8
Businesses with less complex needs
Small- and medium-sized
enterprises
Corporates
Om
nic
han
ne
l C
om
me
rce
We
b-f
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sed
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mm
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WEB
WEB
SALES REPS
TAKKT AG
TAKKT 4.0
February 2020 9
TAKKT AG February 2020 10
New organizational approach to provide the basis for additional growth
• While showing above-average profitability, TAKKT has grown better than the market over the last two years, but in some cases fell short of its own growth expectations and the performance of stock-listed peers
• The current organizational set-up has reachedits limits. We have lost speed through theparallel management of diverse stand-alonebusiness models. The dynamic marketenvironment requires quick decision-makingand a clear focus
• Operational excellence needs to be improved in all our businesses
Situation TAKKT 4.0
New organizational approach based on 3 elements:
• Focusing with two business models on two customer types to reduce complexity and best serve the different customer needs
• Transforming the organization to allocate management responsibilities and functions at the relevant level, to create room for entrepreneurial spirit. Acquisitions can be integrated more easily within the future set-up
• Strengthening operational excellence to intensify the implementation of ‘best practice’ approaches and continuous improvement
TAKKT AG February 2020 11
Focusing with two business models on two customer types
• TAKKT will focus on two business models, Omnichannel and Web-focused Commerce
• Omnichannel Commerce addresses with its multiple touchpoints and broad service offerings via online channels, key account managers and catalogs B2B customers with complex needs
• Web-focused Commerce focuses its offerings primarily via online channels on the less complex needs of the more transactional and price-conscious B2B customer
• This reduces complexity in the Group and leads to a more consistent positioning for the specific needs of 2 different customer types (value-add service versus best-value for money)
• The 2 customer types are best addressed with distinct and scalable business models with different speed, separate management and different working cultures
→ New segmentation will start in 2020
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TAKKT AG
Omnichannel Commerce
February 2020 12
Focusing on 2 business models in order to reduce complexity in the Group: consistent positioning for the needs of 2 different customer types
TAKKT until 2019 TAKKT tomorrow
Kaiser+Kraftgroup
ratio-formgroup
New-port
group
D2Ggroup
Hubert group
NBFgroup
Central group
TAKKT EUROPE TAKKT AMERICA
TAKKT AG
Web-focused Commerce
TAKKT AG
positioningKaiser+
Kraftratio-form
NBFNew-port
D2G
Portfolio of individual businesses2 segments and 7 divisions
Hubert* Central*
* Exploring strategic options for Hubert und Central
TAKKT AG February 2020 13
Transforming the organization
• Re-allocation of responsibilities accross three levels (business, segment, Group) with strong focuson functional organization
• Individual businesses dedicate all resources to customer-centric activities
• Segments integrate business model specific functions that ensure highly professional and efficient operations through implementation of best practice or bundling, hence making it easier to scale
• Segments foster cultural change
• Group level is responsible for functional activities that do not thwart speed of segment and which can be best realized on Group level
• Within TAKKT´s management board there will be one dedicated member for the management of the Omnichannel Commerce segment and one dedicated member for the Web-focused Commerce segment
• Segments are empowered to make all operational decisions
• Segments are the base for additional acquisitions in order to strengthen the different market positions further
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Transforming the organization: Management Board responsibilities
February 2020 14
Omnichannel Commerce segment
Web-focused Commerce segment
TAKKT AG
Heiko HegweinBoard Member, Head of
N.N.Board Member, Head of
Felix ZimmermannCEO
Claude TomaszewskiCFO
Groupfunctions
Groupfunctions
TAKKT AG February 2020 15
Strengthening operational excellence
• Development of new management and steering methods to drive operational excellence
• Hiring of operational excellence experts, building an operational excellence network
• The allocation of core competencies on segment level creates higher efficiency, e.g. quicker learning curves, higher degree of integration, etc.
3
TAKKT AG February 2020 16
Benefits of TAKKT 4.0
• Stronger and sharper market positioning as one of the market leading Omnichannel- and Web-focused businesses
• Scalable organization with organic growth rates that are higher than those of the comparable markets and similar to capital market peers
• Focused M&A activities will support additional growth for both segments
Accelerated growth Stronger market position Faster decision making
• Give both segments operational independence
• Empowerment on the relevant level
• Strengthening of success-critical competencies
• Higher degree of integration within both segments
• Clearer focus of the management capacities
→ TAKKT 4.0 creates the basis to unlock additional growth potential
TAKKT AG February 2020 17
TAKKT 4.0 builds on previous initiatives Dynamic and Digital Transformation
Dynamic Digital Transformation TAKKT 4.0
• Modernization- and Growth-initiative• Integrated multi-channel approach• Expansion of web-focused brands• Push to expand private label products
and direct imports
• Focusing on customer centricity• Transforming the organization into
„digital first“• Digital Agenda with more than 100
measures to digitalize the corebusiness
• Developing new business models foryounger, fast-growing business models(Newport)
• Focusing with 2 business models on 2 customer types
• Re-allocation of responsibilities withstrong focus on functional organization
• Strengthening operational excellence
2013 – 2016 2017 – 2020 2020 – 2023
TAKKT AG
Strategy
February 2020 18
TAKKT AG
Four strategic goals
February 2020 19
Grow profitably
Organic growth(3-5% p.a. on average)
• Attractive markets• E-commerce growth rates above
average market growth
Growth through acquisitions(around 5% p.a. on average)
• Expansion of the customer valueproposition
• Strengthening existing businessmodels
Profitability(EBITDA margin between 12 and 16%)
• Balance between growth and profitability
• Investments of EUR 50 million by 2020
• Sustainable organizational transformation
Digitalize the core business
• Regional diversification• Diversified share of sales with
various customer groups• Balanced product range
Diversify risk
• Industry role model for sustainability
• Sustainability as “built-in” rather than an “add-on” in the day-to-day corporate management
Act sustainably
1
2 3 4
TAKKT AG
36.5%43.9% 46.8%
52.1% 54.0%
2015 2016 2017 2018 H1/2019
Grow profitably organically: E-commerce growth rates above average market growth
February 2020 20
10.6%
7.9%
11.6%
6.1%
2016 2017 2018 H1/2019
Organic e-commerce growth (in percent) Share of e-commerce in order intake (in percent)
TAKKT AG February 2020 21
Grow profitably through acquisitions: XXLhoreca acquired in May 2019 strengthensNewport division in Europe
• E-commerce business specialized in food service products for hotels, restaurants and catering companies
• Sales of EUR 14m with a double-digit EBITDA margin
• Active as a one-stop shop in the Netherlands, Belgium and France, and now also in Germany and Austria
TAKKT AG
Digitalize the core business: We invest around € 50 million until 2020 for theimplementation of our digital agenda and up to € 20 million for start-up investments
February 2020 22
In EUR million 2016 2017 2018 2019 FC 2020 BUD
Additional personnel expenses (year-on-year) 0.6 3.9 2.9 1 1
Other expenses 1.9 3.8 4.0 3 4
Capital expenditure 1.4 8.7 8.4 6 6
Digital agenda cost (investment view) 3.9 16.5 15.3 10 11
Personnel expenses (cumulative) 0.6 4.4 7.3 8 9
Other expenses 1.9 3.8 4.0 3 4
Digital agenda cost (EBITDA impact) 2.5 8.3 11.3 11 13
TAKKT Start-up investments 1.0 4.5 2.3 3 4
TAKKT AG
Diversify risks: Diversification on regions, customers and product ranges
February 2020 23
44%
23%
33%
Regions
North America
Germany
Europe without Germany
2018
Balanced contribution to sales from two continents
28%
16%23%
13%
20%
Customer groups
ManufacturingTradeServicesNon-profit and public organizationsOthers
2018
Low dependency from single customer groups
17%
17%
25%
14%
9%
13%5%
Product ranges
Storage and TransportPlant and EnvironmentOfficeFood and DiningPackaging and ShippingSales Promotion
2018
Broad product portfolio –multi-purpose use
TAKKT AG
Act sustainably: Role model for sustainability in our industry
February 2020 24
Direct marketing is more carbon-efficient than local stores
Lower carbon footprint by increased efforts to furtherreduce or compensate for emissions(e.g. carbon-neutral shipping)
Efficiency of the direct marketing model
Compliance with UN Global Compact since 2012
Reporting according to most recent GRI standards at “comprehensive” application level
German CSR Award 2018 in the „Ecological Commitment“ category
Compliance and reporting
Expansion of the supplier evaluation program
Carbon-neutral print advertising
Emissions from parcel and cargo shipmentsto be offset to a large degree
Activities along the value chain
TAKKT has defined non-financial performance indicators and determined goals and
measures to be achieved by 2020
Focus areas entail sourcing, marketing, logistics, resources & climate, employees and society
Ambitious targets for 2020
TAKKT AG
Key performance figures andindicators
February 2020 25
TAKKT AG
Overview of key performance figures and indicators
February 2020 26
• Organic sales development• Number of orders and average order
value• Gross profit margin• EBITDA margin• TAKKT cash flow margin• Capital expenditure ratio
Financial key figures
• TAKKT value added• Return on Capital Employed (ROCE)
Value-based figures
• Share of private labels in order intake• Share of direct imports in purchase
volume
Product range figures
• Equity ratio• Debt repayment period• Interest cover• Gearing (debt-equity ratio)
Internal covenants
• Launched and completed measures• Newly created positions• Organic e-commerce growth• Share of e-commerce in order intake
Digital agenda indicators
• A total of 16 indicators across the six focus areas sourcing, marketing, logistics, resources & climate, employees and society
Sustainability indicators
TAKKT AG
Financial key figures
February 2020 27
in EUR million 2014 2015 2016 2017 2018
Organic sales development in percent 5.5 4.7 5.2 0.4 3.4
Number of orders in thousand 2,182 2,225 2,409 2,465 2,676
Average order value in EUR 450 482 469 458 449
Gross profit margin in percent 42.6 42.6 42.6 42.5 41.5
EBITDA margin in percent 14.0 14.8 15.2 13.5 12.7
TAKKT cash flow margin in percent 10.1 10.7 11.2 9.8 10.2
Capital expenditure ratio in percent 1.4 1.3 1.5 2.1 1.8
TAKKT AG
12.1%13.7%
15.5%17.9%
18.9%
2015 2016 2017 2018 H1/2019
Product range figures
February 2020 28
15.9%18.3%
20.7% 21.7%23.2%
2015 2016 2017 2018 H1/2019
Share of private labels in order intake (in %) Share of direct imports in purchase volume (in %)
TAKKT AG
Digital agenda indicators
February 2020 29
26
78
98
2016 2017 2018
Newly created positions
100114
27
44
2017 2018
Launched and completed measures Share of e-commerce in order intake (in percent)
10.6%
7.9%
11.6%
6.1%
2016 2017 2018 H1/2019
Organic e-commerce growth (in percent)
Launched
Completed
36.5%
43.9%46.8%
52.1% 54.0%
2015 2016 2017 2018 H1/2019
TAKKT AG
18.928.5
38.3 43.130.4
7.6
8.4
8.57.3
7.226.5
36.9
46.850.4
37.6
2014 2015 2016 2017 2018
14.4%
15.7%16.5%
14.6%14.0%
2014 2015 2016 2017 2018
Value-based figures
February 2020 30
Return on Capital Employed (in %)TAKKT value added (in EUR million)
* Adjusted for amortization of intangible assets resulting from acquisitions and the related tax impact.
*
*
**
*
TAKKT AG
Internal covenants
February 2020 31
2.52.2
1.61.4 1.4
2014 2015 2016 2017 2018
9.8
14.4
18.316.3
23.8
2014 2015 2016 2017 2018
0.6
0.5
0.3
0.2 0.2
2014 2015 2016 2017 2018
43.8%49.1%
55.2%61.2% 60.8%
2014 2015 2016 2017 2018
Equity ratio (in %) Debt repayment period (in years)
Interest cover Gearing
TAKKT AG
Sustainability indicators
February 2020 32
Focus area Key figure 2014 2015 2016 2017 2018
Sourcing
Share of sourcing volume from certified suppliers 23.7% 36.3% 40.5% 46.8% 44.2%
Share of direct imports sourcing volume from certified suppliers 39.8% 39.3%
Share of sales from sustainable product ranges 6.6% 9.6% 9.8% 9.3% 9.5%
Marketing
Carbon-neutral web shops for major companies 7 12
Paper consumption print advertising materials per order 5.4kg 4.2kg
Share of carbon-neutral advertising materials 12.1% 19.9%
LogisticsShare of carbon-neutral parcel delivery 91.4% 93.5%
Share of carbon-neutral general cargo delivery 44.7% 48.9%
Resources and Climate
Major companies with carbon footprint 7 10 10 13 13
Major companies with a certified environmental mgmt. system 1 3 3 6 6
Major companies with a certified energy management system 4 4
Energy consumption at GER / US locations per order in megajoule 70.6 66.7
EmployeesShare of retained „digital talents“ 90.9% 89.9%
Share of women in top executive positions 10.5% 12.3%
Society
Percentage of employees who have the opportunity to take a paid leave for local volunteer involvement
18.4% 37.9% 41.2% 65.7% 70.2%
Percentage of employees who took part in local volunteer projects 15.1% 18.0%
TAKKT AG
Outlook 2019
February 2020 33
TAKKT AG February 2020 34
Full year outlook: TAKKT expects significantly weaker business in the fourth quarter and reacts with structural cost adjustments
Expectations for Q4/19Economic environment Forecast TAKKT Group
• Decreasing GDP growth projections for 2019 for both Europe and the US
• US with significantly stronger growth rate than Europe
• Trade conflict with negative impact on economic development
• Industry indicators point to difficult environment in Europe, while US markets are more positive
• TAKKT expects the organic sales development to continue to weaken noticeably due to a further decline in the economic and market environment
• In this case, TAKKT has planned structural cost adjustments in addition to the ongoing disciplined cost management, which will lead to one-off expenses in Q4
Organic sales developmentminus 1% to minus 2%
EBITDA marginaround 12%
TAKKT AG
TAKKT dividend policy, share and equity story
February 2020 35
TAKKT AG
TAKKT dividend policy
February 2020 36
Annual payment of base dividendincreased or stable since IPO in 1999
Payout for 2018
EUR 0.85 per share(EUR 0.55 base dividend plus
EUR 0.30 special dividend)
Reliable dividend policy
• Payout ratio within a corridor of 35 to 45 percent of the profit
• TAKKT aims for a consistent and reliable dividend stream
• Willingness to return funds to shareholders via a special dividend when equity ratio is high and funds cannot be reinvested. Payment of special dividend for fiscal years 2008, 2011 and for 2018.
Attractive dividend
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Dividend per share in Euro
0.85
0.32
0.80
0.32 0.32 0.32 0.32
0.50 0.55 0.55
0.85
0.32 0.32
0.55
TAKKT AG
TAKKT equity story at a glance
February 2020 37
38.5% 40.5% 41.4% 43.6% 41.5%
1999 2003 2008 2013 2018
Gross profit margin > 40% (target)
Reliable dividend payouts (in EUR)
11.2% 11.2%14.3% 12.9% 12.7%
1999 2003 2008 2013 2018
EBITDA margin 12-15% (target)
7.4% 7.3%10.4% 8.8% 10.2%
1999 2003 2008 2013 2018
TAKKT cash flow margin > 8% (target)
0.32 0.32 0.50 0.55 0.55 0.85
2013 2014 2015 2016 2017 2018
Dividend EPS
1.34
0.801.00
1.24 1.39 1.47
Group companies are market-leaders in attractive market niches with high operational margins
TAKKT is a worldwide, diversified group of B2B direct-marketing specialists for business equipment
Growth opportunities through organic initiativesas well as upside from opportunistic acquisitions
Business model generates high free cash flows and allows stable dividend payouts
EBITDA margin corridor between 12 and 16%
Stable, long-term oriented shareholder structure with Franz Haniel & Cie. GmbHas majority shareholder
TAKKT AG
TAKKT investor relations
February 2020 38
IR Contact
Christian Warns / Benjamin BühlerPhone: +49 711 3465-8222 / -8223Fax: +49 711 3465-8100e-mail: [email protected]
www.takkt.comTAKKT AG is headquartered in Stuttgart, Germany.
Upcoming Events
February19. Preliminary results 2019
March19. CM-CIC ESN Market Solutions Forum, Paris26. Annual report 2019 and analysts‘ conference