roadshow zürich 1. juli 2019 · 2019. 7. 8. · roadshow zürich 1. juli 2019. takkt ag agenda 1....
TRANSCRIPT
Roadshow Zürich
1. Juli 2019
TAKKT AG
Agenda
1. Business model
2. Strategy
3. Key performance figures and indicators
4. Financials Q1/2019
5. Impact IFRS 16
6. Outlook 2019
7. TAKKT share, dividend policy and equity story
July 2019 2
TAKKT AG
Business model
July 2019 3
TAKKT AG
TAKKT is a portfolio of B2B direct marketing specialists
July 2019 4
TAKKT AG
TAKKT is organized into two segments and seven divisions
July 2019 5
TAKKT AMERICATAKKT EUROPE
Kaiser+Kraftgroup
Ratioformgroup
newportgroup
Hubert group
Central group
D2Ggroup
NBF group
TAKKT AG
restaurant equipment
Our divisions are product specialists and sell equipment and specialties with an overall average order value of 450 EUR
Kaiser+Kraftgroup
plant, warehouse and office equipment
ratioformgroup
packaging solutions
Newport group
new business models and
start-ups
D2Ggroup
displayproducts
Hubert group
merchandising and food
equipment
NBFgroup
office equipment
Central group
TAKKT EUROPE TAKKT AMERICA
July 2019 6
TAKKT AG
Fragmented market environment offers good growth potential
July 2019 7
TAKKT companies either run a multi-channel or a web-focusedmodel
TAKKT companies partially use marketplaces as an additional sales channel
platform models (marketplaces)
multi-channel models
web-focused models70-90% 10-30%
Store-based businesses Direct-marketing
TAKKT AG
Our market position – value-add services for customers beyond pure distribution
Digital solutions
• Customers are offered tailored web shops and access to e-procurement solutions
• New solutions are developed based on new technologies and in collaboration with the customers
• More portals with self-service features being built
• Innovative solutions can be tested through investments in start-ups
Personal advice
• Experts help customers select the relevant product
• Sales representatives prepare personalized offers
• Product managers provide customized solutions and products on request
Easy procurement process
• Customers choose from preselected products
• Customers place the order using their preferred sales channel (online, print, tele and field activities)
• Own warehouses ensure fast deliveries
Full service
• Services range from personal advice, needs analysis, planning and offers through to delivery and assemblyof the products
• Long warranty periods
• Availability guarantee and ordering of spare parts over several years
Added valuesfor our
customers
July 2019 8
TAKKT AG
Our multi-channel strategy offers multiple touch points for our customers according to individual preferences
Small businesses
Mid-sized corporates
Largecorporates
Customer Characteristics Channels
• Frequent and regular demand
• Focus on efficiency of procurement process and services
• Customer lifetime value (loyal)
• Less frequent, irregular demand
• Focus on price
• Transaction-oriented and less loyal
July 2019 9
TAKKT AG
B2B direct marketing at a glance
July 2019 10
• Most efficient way to market and distribute in the B2B market
• Constant gain of market share versus local, store-based retail network
• Clear business model which will benefit from the trends towards e-commerce and digitalization
• High profitability (EBITDA margin 12-16%) with a comparably low capital need (capex 1-2% of sales)
TAKKT AG
Strategy
July 2019 11
TAKKT AG
Four strategic goals
July 2019 12
Grow profitably
Organic growth(3-5% p.a. on average)
• Attractive market environment• Digitalize the core business• Develop new business models• Reshape the role of TAKKT AG
Growth through acquisitions(around 5% p.a. on average)
• Expansion of the customer valueproposition
• Strengthening existing businesses• Tapping into new target markets
Profitability(EBITDA margin between 12 and 16%)
• Best balance to develop a sustainable and profitable portfolio
• Significantly increase e-commerce business until 2020
• Sustainable organizational transformation
• Investments of EUR 50 million
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
Environment for younger, fast-growing business models
Allow a more independent positioning and enable a better focus on the requirements of smaller business customers
Investments in innovative start-upsand implementation of digital solutions and technologies
Grow profitably: Three strategic initiatives to drive organic growth
July 2019 13
More than 100 measures in 6 areas
Digitalize the core business Develop new business models Reshape the role of TAKKT AG
Expand activities to increase thevalue of individual companies
Among others, this includes drivingstrategic intitatives, selection oftarget markets, portfoliomanagement and strategic personnelmanagement
Increased focus on operational excellence as well as data & analyticswith an expert team for each thesetopics in both Europe and the US
TAKKT AG
Grow profitably:E-Commerce competency secures growth
July 2019 14
10.6%
7.9%
11.6%
2016 2017 2018
Organic e-commerce growth (in percent)
52.1%
30.1%36.5%
43.9% 46.8%
2014 2015 2016 2017 2018
Share of e-commerce in order intake (in percent)
TAKKT AG
• Suitable additions to existingactivities
• Focus on unlocking synergiesand improving the marketposition
Grow profitably: Revised M&A strategy with broader profile
July 2019 15
• Increase customer valueproposition by acquiring(smaller) pre- and post-salesactivities
• Expand existing range ofservices with solutions formanufacturing or refiningproducts
Enriching thecustomer value proposition
Expanding existing businesses
• Establish an additional divisionin the TAKKT portfolio
• Targets should have a sufficientsize (over EUR 50m) and operate in attractive marketenvironment
Tapping into new target markets
TAKKT AG July 2019 16
Grow profitably: Strengthening market intelligence and refining criteria to reflect broader profile
• Profitability requirementrelevant for ‚new targetmarkets‘ and ‚expanding ofexisting activities‘
• Advanced digital maturitylevel and e-commerceexpertise
• Gaining expertise and talent
Acquisition criteria
• Broaden the Group‘s profileand customer valueproposition
• Stronger focus on addedvalue through additional service offerings
• Additional growth and diversification of theportfolio
Acquisition goals
• Strengthen marketintelligence capabilities
• Implementation of a processto identify relevant trendsand attractive target markets
• Shift away from a moreopportunistic M&A approach
Market intelligence
TAKKT AG
Diversify risks:Diversification on regions, customers and product ranges
July 2019 17
44%
23%
33%
Regions
North America
Germany
Europe without Germany
2018
Balanced contribution to sales from two continents
28%
16%23%
13%
20%
Costumer 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
July 2019 18
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
July 2019 19
TAKKT AG
Overview of key performance figures and indicators
July 2019 20
• 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• Additional personnel expenses• Other expenses• Capital expenditure and start-up
investments• 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
July 2019 21
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
10.0%12.1%
13.7%15.5%
17.9%
2014 2015 2016 2017 2018
Product range figures
July 2019 22
14.7%15.9%
18.3%20.7% 21.7%
2014 2015 2016 2017 2018
Share of private labels in order intake (in %) Share of direct imports in purchase volume (in %)
TAKKT AG
Digital agenda indicators
July 2019 23
30.1%36.5%
43.9%46.8%
52.1%
2014 2015 2016 2017 2018
26
78
98
130
2016 2017 2018 2019e
Number of digital talents
100114
27
44
2017 2018
Launched and completed measures Share of e-commerce in order intake (in percent)
7.9%
11.6%
2017 2018
Organic e-commerce growth (in percent)
Launched
Completed
TAKKT AG
Our plan is to invest around € 50 million until 2020 for the implementation of our digital agenda and up to € 20 million for start-up investments
July 2019 24
In EUR million 2016 2017 2018 2019 BUD 2020e
Additional personnel expenses (year-on-year) 0.6 3.9 2.9 2 2
Other expenses 1.9 3.8 4.0 4 4
Capital expenditure 1.4 8.7 8.4 6 6
Digital agenda cost (investment view) 3.9 16.5 15.3 12 12
Personnel expenses (cumulative) 0.6 4.4 7.3 9 11
Other expenses 1.9 3.8 4.0 4 4
Digital agenda cost (EBITDA impact) 2.5 8.3 11.3 13 15
TAKKT Start-up investments 1.0 4.5 2.3 4 4
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
July 2019 25
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
July 2019 26
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
July 2019 27
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
Financials Q1/19
July 2019 28
TAKKT AG
Good organic sales growth in the first quarter
July 2019 29
276.1306.9
Q1/18 Q1/19
33.439.1
12.1% 12.7%
Q1/18 Q1/19
Sales (in EUR million) EBITDA (in EUR million) and margin (in %)
• Sales increase by 11.2% • Organic sales growth of 5.0%• Positive effects from portfolio changes (+2.6%) and from
currency fluctuations (+3.6%)
• EBITDA margin at 12.7% (12.1%)• First-time application of IFRS 16 has a positive effect of
around one percentage point on the EBITDA margin• Adjusted for this effect, profitability is slightly below the
previous year due to the lower gross profit margin and structural adjustments at Hubert and ratioform
TAKKT AG
Solid performance in Europe despite a slow-down of economic indicators
July 2019 30
160.0176.0
Q1/18 Q1/19
27.230.0
17.0% 17.0%
Q1/18 Q1/19
Sales (in EUR million) EBITDA (in EUR million) and margin (in %)
• Sales increase of 10.1%• Organic sales growth of 4.5%• Significant additional contributions from acquisitions of
OfficeFurnitureOnline and Runelandhs (+5.5%) while currency effects are marginal (+0.1%)
• KAISER+KRAFT with a slight single-digit and ratioform with high single-digit organic growth; Newport clearly in the double-digits
• EBITDA margin at 17.0% (17.0%)• First-time application of IFRS 16 has a positive effect of
around one percentage point on the EBITDA margin• Structural effect from last year’s acquisitions and structural
adjustments at ratioform have a negative impact on profitability
TAKKT AG
Strong sales increase in the US due to organic growth at all divisions and stronger USD
July 2019 31
116.2130.9
Q1/18 Q1/19
10.5
12.9
9.1% 9.9%
Q1/18 Q1/19
Sales (in EUR million) EBITDA (in EUR million) and margin (in %)
• Sales increase by 12.7%• Organic sales growth of 5.8%• Discontinuation of Hubert’s European business with a
negative portfolio effect of -1.6%• Currency effects at +8.5% due to a stronger USD• Hubert, Central and D2G with slight organic growth, NBF
with double-digit growth
• EBITDA margin at 9.9% (9.1%)• First-time application of IFRS 16 has a positive effect of
around one percentage point on the EBITDA margin• Repositioning of Hubert with a negative effect on earnings
TAKKT AG
Increase in TAKKT cash flow also due to IFRS 16
July 2019 32
in EUR million Q1/18 Q1/19
profit 18.3 19.5
+ depreciation +6.7 +9.7
+/- deferred taxes expense/income +0.5 +0.6
+/- other non-cash expenses/income +1.1 +1.1
TAKKT cash flow 26.6 30.9
26.6
30.9
9.6% 10.1%
Q1/18 Q1/19
TAKKT cash flow (in EUR million) and margin (in %)
in EUR million Q1/18 Q1/19
EBITDA 33.4 39.1
- financial result -1.6 -2.7
- current taxes -6.3 -6.6
+/- other non-cash expenses/income +1.1 +1.1
TAKKT cash flow 26.6 30.9
• Definition of TAKKT cash flow was adjusted at the beginning of 2019. Adjusted TAKKT cash flow shown for Q1/18 is EUR 1.1 million higher compared to the figure published last year
• Positive impact on TAKKT cash flow margin from new lease accounting (IFRS 16) of around one percentage point
TAKKT AG
Strong cash flow generation
July 2019 33
in EUR million Q1/18 Q1/19
TAKKT cash flow 26.6 30.9
Change in net working capital as well as other adjustments
+2.0 -3.3
Cash flow from operating activities 28.6 27.6
Capital expenditure in non-current assets -6.5 -4.3
Proceeds from disposal of non-current assets +0.1 +0.4
Free TAKKT cash flow(for acquisitions, payout to shareholders and loan repayments)
22.2 23.7
• IFRS 16 with the same positive impact on TAKKT cash flow as on EBITDA
• Net working capital: Higher increase in trade receivables, mainly due to higher organic growth compared to Q1/18
• Capital expenditure: Lower than prior year also due to less investments into start-ups; continued investments into digital agenda
TAKKT AG
Very solid balance sheet
July 2019 34
150.8
189.6
12/31/2018 03/31/2019
60.8% 59.1%
12/31/2018 03/31/2019
• First-time application of IFRS 16 resulted in an increase of around EUR 56 million in net financial liabilities
• Slight decrease in equity ratio
TAKKT AG
Impact IFRS 16
July 2019 35
TAKKT AG
Application of IFRS 16 will impact balance sheet and earnings figures
July 2019 36
Expected impact on profit and loss in 2019(in EUR million)
∆
Other operating expenses(Operating leasing and rents)
-12
EBITDA +12
Depreciation -11
Finance expenses -2
Profit -1
Expected impact on balance sheet in 2019(in EUR million)
∆
Property, plant and equipment +55
Liabilities +55
• Positive effect of around one percentage pointon EBITDA margin from 2019 onward
• Negative effect of around 3 percentage pointson equity ratio
→ As a result, TAKKT has widened its EBITDA margin targetcorridor to 12 – 16 percent
TAKKT AG
Outlook 2019
July 2019 37
TAKKT AG
Organic sales growth
38July 2019
Organic growth 2017 Q1/18 Q2/18 Q3/18 Q4/18 2018 Q1/19
TAKKT Group +0.4% -1.0% +4.7% +5.0% +5.0% +3.4% +5.0%
TAKKT Europe +2.6% +0.6% +5.9% +6.1% +4.1% +4.1% +4.5%
TAKKT America -1.9% -2.8% +3.5% +4.0% +6.1% +2.7% +5.8%
TAKKT AG
Outlook: Expectations of slightly positive organic growth and an EBITDA margin in thetarget corridor
July 2019 39
Expectations TAKKT AMERICAExpectations TAKKT EUROPE Forecast TAKKT Group
• Lower GDP growth than in 2018• Industry indicators, especially PMI,
point to a slowdown in the first half of the year in Europe
• Overall less favourable market environment than in the previous year
• GDP growth below 2018 but significantly stronger than in Europe
• Industry indicators currently imply similar economic environment as in previous year
• Repositioning of Hubert’s US business will have a negative impact of up to two percentage points on TAKKT’s organic growth rate
• In the scenario above, TAKKT expects that the negative impact from economic risks such as Brexit and trade conflicts will remain limited. If the business environment is worse than expected, TAKKT will only be able to achieve a stable or even slightly negative organic sales development. In the event of very positive economic data, TAKKT should be able to increase organic sales more significantly.
• Gross profit margin is expected to be similar to prior year in the US while structural impact from acquisitions should be slightly negative in Europe. Application of IFRS 16 will have a positive impact of around one percentage points on EBITDA and TAKKT cash flow margins.
• Even in the event of a significant slowdown in business, the Group attaches great importance to achieving the profitability targets and has prepared measures for flexible cost adjustments. If the persistently weak economic indicators become noticeable in the order intake, TAKKT will implement these measures promptly.
Slightly positiveorganic sales growth
EBITDA marginof 12 - 16%
TAKKT AG
TAKKT share, dividend policy and equity story
July 2019 40
TAKKT AG
TAKKT share performance, shareholder structure and analyst recommendations
July 2019 41
50
100
150
200
TAKKT DAX MDax SDAX
50.2%49.8%Franz Haniel &Cie.Free float
Shareholder structure
53
1
Buy
Hold
Sell
Analyst recommendations
Total Shareholder Return: TAKKT and indices
Average price target of EUR 17.3
TAKKT AG
TAKKT dividend policy
July 2019 42
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
July 2019 43
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 portfolio of B2B direct-marketing specialists for business equipment
Growth opportunities through organic initiatives (digital agenda)as 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
July 2019 44
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
Basic data TAKKT share Historic share price development (Xetra)
ISIN / WKN / Ticker DE0007446007 / 744600 / TTK
No. shares 65,610,331
Type No-par-value bearer shares
Share capital EUR 65,610,331
Listing September 15, 1999
Index SDAX, prime standard
Designated sponsors Pareto Securities, Oddo Seydler, Hauck & Aufhäuser
TAKKT AG
July1. Roadshow Zurich25. Earnings Call Q2
August29. Commerzbank Sector Conference, Frankfurt
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