Think digital, act digital. Oddo BHF Forum, Lyon January 10 th, 2019

Transcription

1 Think digital, act digital Oddo BHF Forum, Lyon January 10 th, 2019

2 Agenda 1. Business model 2. Strategy 3. Key performance indicators 4. 9M 2018 and outlook TAKKT share, dividend policy and equity story 2

3 Business model 3

4 TAKKT is a portfolio of B2B direct marketing specialists 4

5 TAKKT is organized into two segments and seven divisions TAKKT EUROPE TAKKT AMERICA Kaiser+Kraft group Ratioform group newport group Hubert group Central group D2G group NBF group 5

6 Our divisions are product specialists and sell equipment and specialties with an overall average order value of 460 EUR TAKKT EUROPE TAKKT AMERICA Kaiser+Kraft group Ratioform group newport group Hubert group Central group D2G group NBF group plant, warehouse and office equipment packaging solutions new business models and start-ups merchandising and food equipment restaurant equipment display products office equipment 6

7 Our market position value-add services for customers beyond pure distribution Personal advice Experts help customers select the relevant product Sales representatives prepare personalized offers Product managers provide customized solutions and products on request 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 Added values for our customers Full service Services range from personal advice, needs analysis, planning and offers through to delivery and assembly of the products Long warranty periods Availability guarantee and ordering of spare parts over several years 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 7

8 Our multi-channel strategy offers multiple touch points for our customers according to individual preferences Customer Characteristics Channels Large corporates Mid-sized corporates Frequent and regular demand Focus on efficiency of procurement process and services Customer lifetime value (loyal) Less frequent, irregular demand Small businesses Focus on price Transaction-oriented and less loyal 8

9 newport group established in January as an additional division strategic target sales brands and start-up investments Bundle the web-based brands OfficeFurnitureOnline, BiGDUG, certeo and Mydisplays and TAKKT start-up investments TAKKT start-up investments Provide an environment for the development of younger, fastgrowing business models Allow a more independent positioning in their branding, product assortments and technology Enable a better focus on the requirements of smaller business customers 9

10 B2B direct marketing: business model at a glance Distance selling 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 12-15%) with a comparably low capital expenditure need (capex 1-2% of sales) 10

11 Strategy 11

12 Corporate goals and strategy by 2020 Grow profitably Long-term organic sales growth by an average of four to five percent per year Growth through opportunistic acquisitions (on average ca. five percent per year) EBITDA margin between 12 and 15 percent Digitalize the business model Implementation of the digital agenda Double e-commerce business from around EUR 450 million (2016) to EUR 900 million (2020) Diversify risk Significant contributions to sales on at least two continents Diversified share of sales with the manufacturing, trade and service sectors and government institutions Balanced product range Act sustainably Industry role model for sustainability Sustainability as built-in rather than an add-on in the day-to-day corporate management 12

13 Grow profitably: Direct marketing is steadily gaining market share vs store-based business 70-90% 10-30% multi-channel models web-focused models platform models (marketplaces) TAKKT companies either run a multi-channel or a web-focused model TAKKT companies partially use marketplaces as an additional sales channel Store-based businesses Direct-marketing 13

14 Grow profitably: M&A activity as further driver for growth Acquisition criteria Medium-sized market leaders or smaller add-ons Often family-owned businesses High gross profit and EBITDA margins Scalable business model in B2B direct marketing Acquisition goals Additional growth Diversification of product range, customers and regions Gaining new expertise Talent acquisition acquisitions divestments 14

15 Grow profitably: Acquisition of OfficeFurnitureOnline at the end of January strengthens newly established newport group Product range Company and acquisition details OfficeFurnitureOnline (OFO) generated sales of roughly 40 million pounds and an EBITDA margin in the low double-digit percentage range in 2016/2017. OFO primarily sells office furniture over the web shop and in addition some warehouse and business equipment under the brand Equip4Work. For an online business, OFO was able to acquire a very loyal customer base of primarily smaller to medium-sized businesses. The purchase price (cash free, debt free) was GBP 35 million with a further potential and variable earn out of up to GBP 10 million. Founding family will remain responsible for management of the company. 15

16 Grow profitably: KAISER+KRAFT group acquired Runelandhs at the end of May to strengthen its market presence in the Nordics Product range Company and acquisition details Runelandhs (founded in 1992) is based in Sweden and sells business and office equipment using a multi-channel approach. In the 2017/2018 financial year, the company generated sales of ca. EUR 14m and an EBITDA margin at the lower end of the TAKKT target corridor of 12 to 15%. With a complementary product range, attractive customer base and profitable growth, Runelandhs is an ideal bolt-on acquisition for KAISER+KRAFT group's existing activities in the Nordics which are bundled under the Gerdmans brand. Improved purchasing conditions and broadening the product range as well as the ability to use the Gerdmans warehouse will unlock synergy potential. Together with Runelandhs, Gerdmans will become one of the leading direct marketing companies for business and office equipment in Sweden. 16

17 Grow profitably: Balance between growth and profitability Simplified P&L structure (in % of sales) >40% 12-15% TAKKT sees the combination of 4-5% organicgrowth on average and EBITDA margin of between 12-15% as best balance to develop a sustainable and profitable portfolio. Starting point is a high gross profit margin which is aimed to be above 40%. gross profit margin sales & marketing personnel other cost (e.g. warehousing, IT) EBITDA margin target corridor 17

18 Digitalize the business model: our vision 2020 We want to double our e-commerce business until 2020 by creating an outstanding customer experience through digitalization. We strive to transform our organization in a step change by putting digital first and focusing on customer centricity. VISION 2020 We will invest up to EUR 50 million until 2020 in our people and new technologies. The implementation of our digital agenda will increase our midterm organic sales growth. 18

19 Digitalize the business model: Three pillars of digital transformation Digitalize the core business Develop new business models Investments in start-ups More than 100 measures in 6 areas Environment for younger, fastgrowing business models Allow a more independent positioning in their branding, product assortments and technology Enable a better focus on the requirements of smaller business customers Investments in innovative start-ups and implementation of digital solutions and technologies in core business or newport 19

20 Digitalize the business model: Current measures of TAKKT s core business are structured along six areas Strategy & Innovation Customer Journey Organization & Culture Data & Analytics Technology Process Automation Marketplaces Start new business and new services Collaboration with start-up investments Focused customer segmentation Personalized marketing Self service features Recruitment of 100 talents New ways of working New workspace Better use of customer data Business Intelligence New ERP systems Improve web-shop technology Vendor Integration Smart shipping solutions Digitalization of workflows 20

21 Digitalize the business model: Our plan is to invest up to 50 million until 2020 for the implementation of our digital agenda in core business and up to 20 million for start-up investments In EUR million e 2019e 2020e Additional personnel expenses year-on-year Other expenses Capital expenditure Digital agenda investments (core business) TAKKT Start-up investments

22 Diversify risks: Diversification on regions, customers and product ranges Regions Customer groups Product ranges 29% 23% % 20% 14% % 28% 12% 14% 2% 18% 9% % 15% 23% North America Germany Europe without Germany Balanced contribution to sales from two continents Manufacturing Trade Services Non-profit and public organizations Others Low dependency from single customer groups Storage and Transport Plant and Environment Office Food and Dining Packaging and Shipping Sales Promotion Others Broad product portfolio multi-purpose use 22

23 Act sustainably: Role model for sustainability in our industry Efficiency of the direct marketing model Direct marketing is more carbon-efficient than local stores Lower carbon footprint by increased efforts to further reduce or compensate for emissions (e.g. carbon-neutral shipping) Activities along the value chain Expansion of the supplier evaluation program Carbon-neutral print advertising Emissions from parcel and cargo shipments to be offset to a large degree Compliance and reporting Compliance with UN Global Compact since 2012 Reporting according to most recent GRI standards at comprehensive application level Ambitious targets for 2020 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 23

24 Key performance indicators 24

25 Overview of key performance indicators Financial key figures Organic sales development Number of orders and average order value Gross profit margin EBITDA margin TAKKT cash flow margin Capital expenditure ratio Value-based figures TAKKT value added Return on Capital Employed (ROCE) Product range figures Share of private labels in order intake Share of direct imports in purchase volume Internal covenants Equity ratio Debt repayment period Interest cover Gearing (debt-equity ratio) Digital agenda indicators 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 Sustainability indicators A total of 16 indicators across the six focus areas sourcing, marketing, logistics, resources & climate, employees and society 25

26 Financial key figures in EUR million M/2018 Organic sales development in percent Number of orders in thousand 2,182 2,225 2,409 2,465 1,913 Average order value in EUR Gross profit margin in percent EBITDA margin in percent TAKKT cash flow margin in percent Capital expenditure ratio in percent

27 Product range figures Share of private labels in order intake (in %) Share of direct imports in purchase volume (in %) 20.7% 21.4% 14.7% 15.9% 18.3% 15.5% 13.7% 12.1% 10.0% 17.9% M/ M/18 27

28 Value-based figures TAKKT value added (in EUR million) Return on Capital Employed (in %) % 14.4% 15.7% 16.5% 14.6% TAKKT Value Added (TVA) TVA adjusted for amortization of intangible assets resulting from acquisitions and the related tax impact

29 Internal covenants Equity ratio (in %) Debt repayment period (in years) 39.0% 43.8% 49.1% 55.2% 61.2% Interest cover Gearing

30 Digital agenda indicators Newly established and filled positions Organic e-commerce growth (in percent) % 7.9% 11.7% M/ M/18 Launched and completed measures Share of e-commerce in order intake (in percent) % 36.5% 43.9% 46.8% 51.6% 7 27 Launched Completed M/18 30

31 Sustainability indicators Focus area Key figure Sourcing Marketing Logistics Resources and Climate Employees Society Share of sourcing volume from certified suppliers 36.3% 40.5% 46.8% Share of direct imports sourcing volume from certified suppliers 39.8% Share of sales from sustainable product ranges 9.6% 9.8% 9.3% Carbon-neutral web shops for major companies 7 Paper consumption print advertising materials per order Share of carbon-neutral advertising materials 12.1% Share of carbon-neutral parcel delivery 91.4% Share of carbon-neutral general cargo delivery 44.7% Major companies with carbon footprint Major companies with a certified environmental mgmt. system Major companies with a certified energy management system 4 Energy consumption at GER / US locations per order in megajoule 70.6 Share of retained digital talents 90.9% Share of women in top executive positions 10.5% Percentage of employees who have the opportunity to take a paid leave for local volunteer involvement 5.4kg 37.9% 41.2% 65.7% Percentage of employees who took part in local volunteer projects 15.1% Five key figures from the sustainability program of measures from 2011 to 2016 are still included in the new program. New indicators are being reported for the first time for

32 9M 2018 and outlook 32

33 TAKKT Group with good growth after a weaker start to the year Sales (in EUR million) EBITDA (in EUR million) and margin (in %) % 12.6% 9M/17 9M/18 Sales increase by 3.8%. Organic sales growth of 2.9%. Recent acquisitions add 5.1%, currency effects have negative impact of -4.2%. 9M/17 9M/18 EBITDA margin at 12.6% (14.2%). Decrease in profitability due to lower gross profit margin and slightly higher cost ratios. Lower gross profit margin predominantly due to higher freight costs and structural impact from acquisitions. Slightly increasing cost ratios, in part because of the expected additional expenses for the digital transformation. 33

34 Substantial contributions from acquisitions add to growth at TAKKT EUROPE Sales (in EUR million) EBITDA (in EUR million) and margin (in %) % 15.8% 9M/17 9M/18 Sales increase of 12.8% Organic sales growth of 4.1% Good overall contributions from acquisitions (10.1%) and slightly negative currency effects (-1.4%) KAISER+KRAFT with solid organic growth, Ratioform just below double-digits 9M/17 9M/18 EBITDA margin at 15.8% (17.5%) Decrease in profitability resulting from a lower gross profit margin; this was in part due to a structural impact from acquisitions 34

35 Good organic growth rates at all TAKKT AMERICA divisions with the exception of Hubert Sales (in EUR million) EBITDA (in EUR million) and margin (in %) % 11.4% 9M/17 9M/18 Sales decrease by -5.2% Organic sales growth of 1.7% Negative currency effects of -6.9% Central, D2G group and NBF with mid single-digit organic growth; Hubert with a high single-digit decline below expectations 9M/17 9M/18 EBITDA margin at 11.4% (12.7%). Decrease in profitability due to lower gross profit margin as well as higher cost ratios All divisions with higher freight costs and lower freight margins; in addition, a new framework agreement with a major customer at Hubert with a significant negative impact on the gross profit margin 35

36 Lower US tax rate and improved financial result with positive impact on cash flow TAKKT cash flow (in EUR million) and margin (in %) in EUR million 9M/17 9M/18 profit depreciation /- deferred taxes expense/income TAKKT cash flow % 9.7% in EUR million 9M/17 9M/18 EBITDA M/17 9M/18 Decrease in TAKKT cash flow markedly less than decline in EBITDA due to a lower US tax rate and improved financial result - financial result current taxes TAKKT cash flow

37 Cash flow generation in EUR million 9M/17 9M/18 TAKKT cash flow Change in net working capital as well as other adjustments Cash flow from operating activities Capital expenditure in non-current assets Proceeds from disposal of non-current assets Free TAKKT cash flow (for acquisitions, payout to shareholders and loan repayments) TAKKT cash flow: Improved financial result and lower current taxes could almost offset the decline in EBITDA Net working capital: Different dynamic in Q3 versus previous year s period and higher increase in inventory from direct imports Capital expenditure: Slightly lower than prior year due to less investments into start-ups; continued investments into digital agenda 37

38 Balance sheet Net financial liabilities (in EUR million) Equity ratio (in %) 61.2% 58.4% 12/31/ /30/2018 Despite the generated free cash flow, increase in financial liabilities due to acquisition payments for Officefurniture- Online and Runelandhs, a deferred payment for Post-Up Stand and the dividend 12/31/ /30/2018 Equity ratio decreased primarily due to the increase in net financial liabilities 38

39 Organic growth overview Organic growth 2016 Q1/17 Q2/17 Q3/17 Q4/ Q1/18 Q2/18 Q3/18 9M/18 TAKKT Group +5.2% +4.1% -2.3% -0.1% -0.1% +0.4% -1.0% +4.7% +5.0% +2.9% TAKKT Europe +3.5% +6.6% -2.5% +4.6% +2.2% +2.6% +0.6% +5.9% +6.1% +4.1% TAKKT America +7.0% +1.5% -2.2% -3.8% -2.6% -1.9% -2.8% +3.5% +4.0% +1.7% January 2019 Oddo BHF Forum 39

40 Outlook 2018: TAKKT confirms its sales and earnings forecast TAKKT EUROPE TAKKT AMERICA Forecast TAKKT Group GDP growth similar to 2017 Slightly higher GDP growth than 2017 Organic sales growth 2 4% EBITDA margin 13-14% TAKKT confirms its organic growth guidance of between two and four percent. For the last quarter, the Management Board expects a higher result than in the previous year s fourth quarter. Both the ongoing good business development and measures to manage income and costs will contribute to this result. As part of this, income was generated from a real estate sale in the United States that has been planned for some time and closed in December. For the full financial year, the Group holds its expected EBITDA margin at the lower end of the initially projected corridor of 13 to 14 percent. Depending on the further course of the trade conflicts that are increasing worldwide, an EBITDA margin of slightly under 13 percent cannot be entirely excluded. 40

41 Outlook 2018: Acquisitions as additional growth driver while FX effects should have an overall negative impact on growth Positive effects of ca. 5pp on reported growth are expected from acquisitions Mydisplays acquired in July 2017, OfficeFurnitureOnline acquired end of January 2018, Runelandhs acquired end of May Fluctuations in the EUR/USD rate have a significant impact on the Group s key figures reported in euros (translation risk) A softer USD by 5% against the previous year will negatively impact reported sales in euro by 2 to 2.5pp. The average EUR/USD rate (1.1809) for 2018 is 5 percent weaker than the average rate for the full year 2017 (1.1272). January 2019 Oddo BHF Forum 41

42 TAKKT share, dividend policy and equity story 42

43 TAKKT share performance, shareholder structure and analyst recommendations Total Shareholder Return: TAKKT and indices Shareholder structure % 50.2% Franz Haniel & Cie. Free float Analyst recommendations Buy Hold 50 7 TAKKT DAX MDax SDAX Average price target of EUR

44 TAKKT dividend policy 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 in 2007, 2008 and Attractive dividend Annual payment of base dividend increased or stable since IPO in 1999 Payout for 2017 EUR 0.55 per share Dividend per share in Euro

45 TAKKT equity story at a glance TAKKT is a worldwide, diversified portfolio of B2B direct-marketing specialists for business equipment Gross profit margin > 40% (target) 38.5% 40.5% 41.4% 43.3% 42.5% Group companies are market-leaders in attractive market niches with high operational margins EBITDA margin 12-15% (target) Growth opportunities through organic initiatives (digital agenda) as well as upside from opportunistic acquisitions EBITDA margin corridor between 12 and 15% 11.2% 11.2% 14.3% 14.2% 13.5% TAKKT cash flow margin > 8% (target) 7.4% 7.3% 10.4% 9.9% 9.8% Reliable dividend payouts (in EUR) Business model generates high free cash flows and allows stable dividend payouts Stable, long-term oriented shareholder structure with Franz Haniel & Cie. GmbH as majority shareholder Dividend EPS

46 TAKKT investor relations IR Contact Christian Warns / Benjamin Bühler Phone: / Fax: investor@takkt.de is headquartered in Stuttgart, Germany. ISIN / WKN / Ticker No. shares 65,610,331 Type Basic data TAKKT share DE / / TTK No-par-value bearer shares Share capital EUR 65,610,331 Listing September 15, 1999 Index Designated sponsors SDAX, prime standard Equinet, Oddo Seydler, Hauck & Aufhäuser Upcoming Events January 10. Oddo BHF Forum, Lyon 23. Unicredit & KeplerCheuvreux GCC, Frankfurt February 21. Earnings call preliminary figures 2018 Historic share price development (Xetra) Jan Mar May Jul Sep Nov Jan