Shaping digital transformation Unicredit & Kepler Cheuvreux GCC, Frankfurt
Business model January 2018 Unicredit & Kepler Cheuvreux GCC 2
TAKKT is a portfolio of B2B direct marketing specialists January 2018 Unicredit & Kepler Cheuvreux GCC 3
TAKKT is organized into seven divisions (as of January 1, 2018) TAKKT EUROPE TAKKT AMERICA Kaiser+Kraft group ratioform group newport group Hubert group Central group D2G group NBF group January 2018 Unicredit & Kepler Cheuvreux GCC 4
Our divisions are product specialists and sell equipment and specialties with an average order value of 470 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 January 2018 Unicredit & Kepler Cheuvreux GCC 5
newport group established as an additional division to develop new business models strategic target sales brands and start-up investments Bundle the web-based brands BiGDUG, certeo and Mydisplays and TAKKT start-up investments TAKKT start-up investments Provide an environment for the younger, fast-growing 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 January 2018 Unicredit & Kepler Cheuvreux GCC 6
Our role in the market value-add services for customers and suppliers beyond pure distribution Our suppliers Our portfolio companies Our corporate customers Fragmented supplier structure: Plant and warehouse equipment Office equipment Packaging solutions Display articles Food service supplies and sales promotion Added values: Preselection of quality products Individual quotes Project consulting Custom-made products Digital solution (e-procurement) Real-time track and trace Sustainability Fragmented customer structure: Corporations Medium-sized companies Small businesses Several hundred suppliers per division Customer solutions along the value chain Up to 1 million customers per division January 2018 Unicredit & Kepler Cheuvreux GCC 7
Our multi-channel strategy offers multiple touch points for our customers according to individual preferences Customer Characteristics Channels Large corporates Frequent and regular demand Focus on efficiency of procurement process and services Customer lifetime value (loyal) Mid-sized corporates Less frequent, irregular demand Small businesses Focus on price Transaction-oriented and less loyal January 2018 Unicredit & Kepler Cheuvreux GCC 8
B2B direct marketing: business model at a glance 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 capex need (capex 1-2% of sales) January 2018 Unicredit & Kepler Cheuvreux GCC 9
Strategy January 2018 Unicredit & Kepler Cheuvreux GCC 10
Strong business model with clearly defined targets Organic growth of 4 to 5% p.a. on average Efficiency of direct marketing Shaping the digital transformation with our digital agenda Growth via opportunistic acquisitions (average 5% p.a.) Well-established B2B market leaders in attractive market niches Access to new products, markets, customers and business models EBITDA margin corridor of 12-15% Diversify risk Diversified sales across regions and customer groups Balanced product range Act sustainably Industry role model for sustainability Sustainability as built-in rather than an add-on January 2018 Unicredit & Kepler Cheuvreux GCC 11
Organic growth above GDP also due to efficiency of direct marketing model Store-based business: ~ 70-90% Direct marketing: ~10-30% Direct marketing is steadily gaining market share vs store-based business Total market volume of EUR 100bn+ with growth potential in line with GDP January 2018 Unicredit & Kepler Cheuvreux GCC 12
Digitalization: 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. January 2018 Unicredit & Kepler Cheuvreux GCC 13
E-Commerce channels today account for just below half of the business Share of e-commerce in order intake (in %) Split between e-commerce channels (in %) 46.3% 36.5% 39.0% 9.6% 28.0% 30.1% 9M/2017 21.0% 15.7% 2013 2014 2015 2016 9M/2017 from multi-channel webshops from web-focused webshops from e-procurement January 2018 Unicredit & Kepler Cheuvreux GCC 14
Gross profit margin stable above 40 percent, also due to private label and direct imports Share of private labels in order intake (in %) Share of direct imports in purchase volume (in %) 15.0% 18.3% 20.6% 12.1% 13.7% 13.9% 14.7% 15.9% 9.6% 10.0% 2013 2014 2015 2016 9M/2017 2013 2014 2015 2016 9M/2017 January 2018 Unicredit & Kepler Cheuvreux GCC 15
Our 6 focus areas of the digital agenda Strategy & Innovation Process Automation Technology Customer Journey Data & Analytics Organization & Culture Marketplaces newport group TAKKT start-up investments Vendor Integration Smart shipping solutions Digitalization of workflows New ERP systems Improve web-shop technology Focused customer segmentation Personalized marketing Self service features Better use of customer data Business Intelligence Recruitment of 100 talents New ways of working New workspace January 2018 Unicredit & Kepler Cheuvreux GCC 16
Our plan is to invest up to EUR 50 million until 2020 for the implementation of our digital agenda (in EUR million) 2017 2018 2019 2020 opex investment (incl. personnel) 10 m 5 m 5 m 5 m capex investment 10 m 5 m 5 m 5 m We will recruit up to 100 additional employees with digital expertise January 2018 Unicredit & Kepler Cheuvreux GCC 17
M&A activity as further driver for growth 2000 2006 2007 2009 2012 2012 2014 2015 2015 2017 Acquisition criteria mainly medium-sized companies (and smaller ones as add-on acquisitions) high EBITDA and gross margins well established market leaders ensure diversification and gain new expertise for the Group Divestment criteria strategic fit growth potential profitability expectations January 2018 Unicredit & Kepler Cheuvreux GCC 18
Diversification of regions, customer groups and product ranges Regions Customer groups Product ranges 22% 1% 2016 48% 14% 17% 2016 28% 9% 14% 2% 18% 2016 18% 29% 13% 28% 17% 22% USA Europe without Germany Germany Others Balanced contribution to sales from two continents Manufacturing Services Trade 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 Broad product portfolio multi-purpose use January 2018 Unicredit & Kepler Cheuvreux GCC 19
Role model for sustainability in our industry New long-term goal for the year 2020 have been defined Examples Percentage of sales from sustainable product ranges Paper consumption per EUR million sales in t 2011 1.7% 2011 34.9 2016 9.8% 2016 13.7 January 2018 Unicredit & Kepler Cheuvreux GCC 20
Value-based figures January 2018 Unicredit & Kepler Cheuvreux GCC 21
Key financial indicators in EUR million 2012 2013 2014 2015 2016 Organic turnover development in percent -2.8-2.6 5.5 4.7 5.2 Number of orders in thousand 2,016 2,171 2,182 2,225 2,409 Average order value in EUR 465 440 450 482 469 Gross profit margin in percent 43.3 43.6 42.6 42.6 42.6 EBITDA margin in percent 14.2 12.9 14.0 14.8 15.2 TAKKT cash flow in EUR million 92.7 83.4 98.7 114.2 125.6 Capital expenditure ratio in percent 0.9 1.0 1.4 1.3 1.4 January 2018 Unicredit & Kepler Cheuvreux GCC 22
Value-based KPIs Return on capital employed (in %) 18.1% 15.7% 14.4% 12.5% 16.5% TAKKT value added (in EUR million) 38.3 5.9 * 26.5 * 36.9 8.4 * 46.8 8.5 * 32.4 18.0 8.3 * 7.6 28.5 38.3 18.9 9.7 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 * Adjusted for amortization of intangible assets resulting from acquisitions and the related tax impact. January 2018 Unicredit & Kepler Cheuvreux GCC 23
Strong free cash flow and solid balance sheet Free TAKKT cash flow (in EUR million) Net financial debt (in EUR million) 95.3 68.4 88.1 89.5 101.4 Strong cash conversion Low maintenance capex 324.9 273.0 217.5 244.0 177.5 Quick deleveraging in years without acquisitions 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Equity ratio (in %) Net financial debt/ebitda 34.7% 39.0% 43.8% 49.1% 55.2% Equity ratio guided in a range between 30 and 60% 2.4 2.2 1.6 1.6 Comparably low debt to EBITDA ratio 1.0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 January 2018 Unicredit & Kepler Cheuvreux GCC 24
TAKKT dividend policy Reliable dividend policy Future 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 2011. Attractive dividend Annual payment of base dividend increased or stable since IPO in 1999 Payout ratio of 40% for 2016 EUR 0.55 per share 0.80 0.80 0.48 0.48 0.85 0.53 0.32 0.32 0.32 0.32 0.32 0.50 Dividend per share in Euro 0.55 0.32 0.32 0.32 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 January 2018 Unicredit & Kepler Cheuvreux GCC 25
Key financials 9M/2017 January 2018 Unicredit & Kepler Cheuvreux GCC 26
Sales growth in the first nine months slowed down by US activities Sales (in EUR million) 841.8 845.4 EBITDA (in EUR million) and margin (in %) 137.4 119.7 16.3% 14.2% 9M/16 9M/17 +0.4% growth +0.5% organic growth 9M/16 9M/17 Adjusted for one-offs, the margin in 9M/16 was 15.3% January 2018 Unicredit & Kepler Cheuvreux GCC 27
Good growth in Europe Sales (in EUR million) EBITDA (in EUR million) and margin (in %) 413.9 423.2 81.9 74.1 19.8% 17.5% 9M/16 9M/17 +2.2% growth +2.8% organic growth 9M/16 9M/17 Adjusted for one-offs, the margin in 9M/16 was 18.7% January 2018 Unicredit & Kepler Cheuvreux GCC 28
Uncertainty in food retail und food service markets weighs on performance in the US Sales (in EUR million) EBITDA (in EUR million) and margin (in %) 428.1 422.4 65.3 53.9 15.3% 12.7% 9M/16 9M/17-1.3% decline -1.7% organic decline 9M/16 9M/17 Adjusted for one-offs, the margin in 9M/16 was 14.3% January 2018 Unicredit & Kepler Cheuvreux GCC 29
High cash flow margin TAKKT cash flow (in EUR million) and margin (in %) in EUR million 9M/16 9M/17 100.1 85.6 profit 75.0 61.9 + depreciation +21.4 +20.4 + deferred taxes +3.7 +3.3 TAKKT CF 100.1 85.6 11.9% 10.1% in EUR million 9M/16 9M/17 EBITDA 137.4 119.7 - net interest exp. -6.3-6.4 9M/16 9M/17 - current taxes -31.0-27.7 TAKKT CF 100.1 85.6 January 2018 Unicredit & Kepler Cheuvreux GCC 30
Strong cash flow generation in EUR million 9M/16 9M/17 TAKKT cash flow 100.1 85.6 Change of net working capital as well as other adjustments -4.1 +2.2 Cash flow from operating activities 96.0 87.8 Capital expenditure on non-current assets -11.2-20.0 Divestiture from non-current assets +0.3 +0.2 Proceeds from the disposal of consolidated companies +1.5 +0.0 Free TAKKT cash flow (for acquisitions, payout to shareholders and loan repayments) 86.6 68.0 January 2018 Unicredit & Kepler Cheuvreux GCC 31
Outlook 2017 January 2018 Unicredit & Kepler Cheuvreux GCC 32
Organic growth overview Organic growth 2014 2015 2016 Q1/17 Q2/17 Q3/17 9M/17 TAKKT Group +5.5% +4.7% +5.2% +4.1% -2.3% -0.1% +0.5% TAKKT Europe +3.3% +0.7% +3.5% +6.6% -2.5% +4.6% +2.8% TAKKT America +8.1% +10.0% +7.0% +1.5% -2.2% -3.8% -1.7% January 2018 Unicredit & Kepler Cheuvreux GCC 33
Outlook for 2017 After Q3, TAKKT anticipates organic sales growth of 0 to 1 percent for the financial year 2017. At the same time, the Board continues to expect the EBITDA margin to come in at the middle of the target corridor. The EBITDA margin is anticipated to be between 13.2 and 13.5 percent. January 2018 Unicredit & Kepler Cheuvreux GCC 34
TAKKT equity story January 2018 Unicredit & Kepler Cheuvreux GCC 35
TAKKT equity story at a glance TAKKT is a worldwide, diversified portfolio of B2B direct-marketing specialists for business equipment Group companies are market-leaders in attractive market niches with high operational margins Growth opportunities through organic initiatives (digital agenda) as well as upside from opportunistic acquisitions EBITDA margin corridor between 12 and 15% 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 January 2018 Unicredit & Kepler Cheuvreux GCC 36
TAKKT investor relations IR Contact Christian Warns / Benjamin Bühler Phone: +49 711 3465-8222 / -8223 Fax: +49 711 3465-8100 e-mail: investor@takkt.de www.takkt.com is headquartered in Stuttgart, Germany. ISIN / WKN / Ticker No. shares 65,610,331 Type Basic data TAKKT share DE0007446007 / 744600 / 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, Kepler, Hauck & Aufhäuser Upcoming Events February 15.02. Preliminary figures 2017 March 21.03. Publication of the annual report 2017 and analysts' conference Historic share price development (Xetra) 19,18 19 15 Jan Mar May Jul Sep Nov Jan 25 23 21 17 January 2018 Unicredit & Kepler Cheuvreux GCC 37