ROADSHOW MARCH 2017 - TAKKT€¦ · OUR MULTI-CHANNEL STRATEGY OFFERS MULTIPLE TOUCH POINTS FOR OUR CUSTOMERS ACCORDING TO INDIVIDUAL PREFERENCES ... e-commerce and digitalization

ROADSHOW MARCH 2017

AGENDA

2 Roadshow | March 2017

BUSINESS MODEL

STRATEGY

VALUE-BASED FIGURES

KEY FINANCIALS 2016

OUTLOOK 2017

TAKKT IS A PORTFOLIO OF B2B DIRECT MARKETING SPECIALISTS


TAKKT AMERICA REORGANIZED INTO FOUR DIVISIONS TO BETTER

SUPPORT FURTHER GROWTH


BEG: Business Equipment Group; PSG: Packaging Solutions Group; MEG: Merchandising Equipment Group

REG: Restaurant Equipment Group; DPG: Displays Group; OEG: Office Equipment Group


OUR DIVISIONS ARE PRODUCT SPECIALISTS AND SELL EQUIPMENT AND

SPECIALTIES WITH AN AVERAGE ORDER VALUE OF 470 EURO

OUR ROLE IN THE MARKET – VALUE-ADD SERVICES FOR CUSTOMERS

AND SUPPLIERS BEYOND PURE DISTRIBUTION



OUR MULTI-CHANNEL STRATEGY OFFERS MULTIPLE TOUCH POINTS FOR

OUR CUSTOMERS ACCORDING TO INDIVIDUAL PREFERENCES

Mid-sized

corporates

Small

businesses

Large

Corporates

CUSTOMER CHARACTERISTICS

• 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

CHANNELS

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 >10%) with a comparably low capital

intensity (cashflow margin > 8%)

AGENDA


BUSINESS MODEL

STRATEGY

VALUE-BASED FIGURES

KEY FINANCIALS 2016

OUTLOOK 2017

STRONG BUSINESS MODEL WITH CLEARLY DEFINED FINANCIAL

TARGETS


Organic growth of 4 to 5% p.a.

on average

• Efficiency of direct marketing

• Implementation of multi-channel PLUS

• Shaping the digital transformation

Growth of 5% p.a. on average

via acquisitions

• Well-established B2B market leaders in attractive market niches

• Access to new products, markets, customers and business models

Diversify risk

• Significant contributions to sales on at

least two continents

• Diversified share of sales across

customer groups

• Balanced product range

Act sustainably

• Industry role model for sustainability

• Sustainability as “built-in” rather than an “add-on”

EBITDA margin within corridor of 12-15%

ORGANIC GROWTH ABOVE GDP ALSO DUE TO EFFICIENCY OF DIRECT

MARKETING MODEL


higher average

order value

lower average

order value

consolidated

supplier

base

fragmented

supplier

base

Store-based

business:

~ 70-90%

Direct

marketing:

~10-30%

Total market volume of EUR 100bn+

with growth potential in line with GDP

Direct marketing is steadily gaining market share vs store-based business

2 MAJOR INITIATIVES TO ADAPT TO CHANGING CUSTOMER NEEDS


MULTI-CHANNEL

DIGITALIZATION

• Transformation of the business model

• Integrated use of 4 marketing and sales channels

print, online, tele and field

• Digitalization changes the purchasing behavior of

customers and their order fulfillment expectations

• TAKKT businesses will develop digital solutions to

enhance the value proposition for their customers

and suppliers

From 2013

From 2016

DYNAMIC: OBJECTIVES HAVE MOSTLY BEEN REACHED IN 2016


KPIs 2013 2014 2015 2016 Objectives

2016

Procurement

Share of new products

in order intake 3.0% 9.0% 16.5% 17.8%

20-25

percent

Share of private labels

in order intake 13.9% 14.7% 15.9% 18.3%

20-25

percent

Share of direct imports

in purchase volume 9.6% 10.0% 12.1% 13.7%

10-15

percent

Marketing

Share of web-only products

in entire product range 29.6% 42.0% 58.7% 75.8%

40-60

percent

Share of SEO in order intake

via search engines 32.1% 32.1% 33.7% 32.9%

30-35

percent

Sales

Share of e-commerce

in order intake 28.0% 30.1% 36.5% 39.0%

35-45

percent

Share of telesales/field sales

in order intake 14.2% 16.4% 16.7% 16.6%

20-25

percent

E-COMMERCE WITH VERY GOOD GROWTH


multi-channel

14.5%

2016

9.2%

e-procurement

web-focused

15.3%

Split between e-commerce channels

25.7% 28.0%

30.1%

36.5% 39.0%

2012 2013 2014 2015 2016

Share of e-commerce in order intake in %

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.

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.

OUR 6 FOCUS AREAS OF THE DIGITAL AGENDA


Strategy & Innovation

We strictly align our business

model with the digital age

and take a critical look at the

status quo.

Data and Analytics

The internet of things and new

technological analysis open up

additional growth opportunities.

Customer Decision Journey

We would like to learn more

about and understand our

customers’ needs and decision

making processes better.

Process Automation

Our processes will become

faster and more efficient,

manual activities will be further

automated.

Organization, Management

and Corporate Culture

We adapt our organization and

procedures in line with our

goals to ensure successful

implementation of our strategy.

Technology

We continue to focus on

modernizing our existing IT

systems and introducing new

ones along the entire value

chain.

WE WILL INVEST UP TO EUR 50 MILLION UNTIL 2020 FOR THE

IMPLEMENTATION OF OUR DIGITAL AGENDA


opex

capex

10 m 5 m 5 m 5 m

10 m 5 m 5 m 5 m

2017 2018 2019 2020

We will recruit up to 100 additional talents personnel

DIGITAL AGENDA: EXAMPLE TAKKT INVESTMENT COMPANY


TAKKT investment company (TBG)

Aim

Getting access to innovative and digital business

models, new product ideas and visionary

founders.

Targets

TAKKT is interested in young businesses with a

focus on B2B direct marketing or innovative

solutions with a high relevance for TAKKT

business.

Entry point

Focus on financing younger companies, who

have already developed a product/service

offering and are looking for partners to help fund

additional growth.

TAKKT as a „smart investor“

Apart from helping to fund growth, TAKKT is also

offering know-how and international expertise.

First investments in 2016

Business model

Digital printing of professional transport

packaging with individually customized design.

USPs

- smaller batches for an attractive price

- very convenient online editor

Business model

Customer retention system, that allows online

shops to print personalized product brochures,

that are put into customers’ packages.

USPs

- Individualized brochure based on customer

journey prior to placing the order

- Easily integrated into fulfillment process

Strategy &

Innovation

DIGITAL AGENDA:

EXAMPLE IMPLEMENTATION OF PRÜFPLANER


Prüfplaner helps customers to maintain an

overview of the legal requirements

regarding inspections

Sends timely reminder of inspections

which are due

Enables documentation and collaboration

within the team

Is cloud-based and immediately ready for

use without installation

Development of ideas

Consistent focus on the customers’ needs.

More than 80 customer interviews conducted

and issue of “statutory inspections” specified.

Findings

Unclear inspection obligations, largely analog

processing resulting in a high level of input.

Large number of external providers; however, no

innovative and focused solution on the market.

Implementation

Concentration on the main functionalities

Agile development based on the latest

technology

Design-driven approach

Design thinking process:

Strategy &

Innovation

DIGITAL AGENDA: EXAMPLE NEW HUBERT.COM WEBSHOP


New look and feel

• Sleek and modern look to help customers

focus on marketing campaigns Hubert is

currently running.

• Improved Category layout for the home page to

illustrate our merchandising expertise.

Better mobile compatibility

• With the new mobile responsive design,

customers from all devices can use the

new Hubert.com effectively.

Agile methodology

• The platform was built using methodology of

agile project management.

Technology

Tablet Mobile

DIGITAL AGENDA: EXAMPLE INNOVATIVE WORK

ENVIRONMENTS


Aim

• Creating innovative work environments to new ways of working and

further develop our corporate culture to such a degree that it supports

the digital transformation

• Improve cross-functional collaboration

• Offer modern communication areas to employees as an alternative to

more traditional conference rooms

• Improve staff satisfaction

Creating state-of-the-art work environments to further develop our

corporate culture and promote broader collaboration and knowledge sharing

Implementation

• Already realized at NBF with the move to a new location in Milwaukee,

WI, USA

• GPA is currently moving to a new location in Fall River, MA, USA

• In planning stage for TAKKT and KAISER+KRAFT at Stuttgart,

construction and refurbishing in 2017/2018



DIGITAL AGENDA: DIGITAL ENTREPRENEURSHIP

ROTATIONAL PROGRAM


7 participants from Europe and the US getting 18 months of top training

• Getting to now key functions of the company

• Working in various digital departments at TAKKT companies

in Germany, the US and other countries

• Assignments at Haniel‘s digital workbench Schacht One

• Stints at a start-up in the TAKKT portfolio

• 1 week in the Silicon Valley

• Using agile methodology such as scrum or design thinking

• Participation in sales-related projects

• Regular meetings with the Management Board

• Trainings and workshops as and when required

With the international trainee program „Digital Entrepreneurship“

TAKKT wants to recruit and train talent at an early stage

Preparation for an executive or key position for the digital transformation of TAKKT Group



DIGITAL AGENDA IS THE NEXT STRATEGIC MOVE TO INCREASE OUR

MIDTERM ORGANIC GROWTH


• DYNAMIC modernization and growth initiative successfully implemented.

• Vision 2020 formulated with the goal to transform our organization in a step

change by putting digital first and focusing on customer centricity.

• Investment commitment of EUR 50 million until 2020, including the recruitment

of up to 100 talents.

• In total, more than 100 measures across our six divisions have been identified.

M&A ACTIVITY AS FURTHER DRIVER FOR GROWTH


2000 2007 2012 2014 2015

2006

2009 2012 2015

Acquisition criteria

• mainly medium-sized companies (and also

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

DIVERSIFICATION OF REGIONS, CUSTOMER GROUPS & PRODUCT

RANGES


USA

48.4 %

2016

22.1%

Germany

Europe without

Germany

28.5%

Regions

1.0 % Others

Balanced contributions to sales

from two continents

Manufacturing

28.1%

2016

14.6 %

Non-profit

and Public

Organizations

Trade

13.0 %

Customer groups

16.7 % Others

Low dependency from single

customer groups

27.6 %

Services

Product ranges

Broad product portfolio –

multi-purpose use

Office

Plant and

Environment

18.2%

22.5 %

14.4 % 1.7 %

Sales Promotion

Others

17.9%

Storage and

Transport

16.7 %

Food and Dining

2016

8.6 %

Packaging

and Shipping

ROLE MODEL FOR SUSTAINABILITY IN OUR INDUSTRY


9.6%

1.7%

2016

2011

+576%

Percentage of sales from sustainable product ranges

13.7

34.9

2016

2011

- 61%

Paper consumption per EUR million sales in t

Examples:

Sustainability update informs about the current status of the sustainability indicators;

new long-term goals for the year 2020 have been defined

AGENDA


BUSINESS MODEL

STRATEGY

VALUE-BASED FIGURES

KEY FINANCIALS 2016

OUTLOOK 2017

GOOD DEVELOPMENT OF KEY FINANCIAL INDICATORS


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

ROCE (return on capital employed) in percent 18.1 12.5 14.4 15.7 16.5

TAKKT value added in EUR million 32.4 9.7 18.9 28.5 38.3

IMPROVED VALUE-BASED KPIS


18.1%

12.5%

14.4% 15.7%

16.5%

2012 2013 2014 2015 2016

Return on capital employed in %

2012 2013 2014 2015 2016

TAKKT value added in EUR million

38.3*

18.0*

26.5*

36.9*

46.8*

32.4

9.7

18.9

28.5

38.3

* Adjusted for amortization of intangible assets resulting from

acquisitions and the related tax effect.

PROPOSAL TO INCREASE DIVIDEND


0.32 0.32 0.32

0.50 0.55

2012 2013 2014 2015 2016*

Dividend per share in EUR

*dividend proposal per share for the

financial year 2016

Proposal for the 2016 financial year will be to increase dividend by 10% to EUR 0.55 per

share which corresponds to a payout ratio of 39.5 percent.

AGENDA


BUSINESS MODEL

STRATEGY

VALUE-BASED FIGURES

KEY FINANCIALS 2016

OUTLOOK 2017

ORGANIC GROWTH AT THE UPPER END OF THE INITIAL GUIDANCE OF

THREE TO FIVE PERCENT


939.9 952.5 980.4

1,063.8 1,125.0

2012 2013 2014 2015 2016

Sales TAKKT Group in EUR million

+5.8% growth

+5.2% organic growth

STRONG GROWTH ESPECIALLY FROM THE US,

SOLID SALES PERFORMANCE IN EUROPE


538.3 563.3

525.8

562.0

2015 2016 2015 2016

Sales in EUR million

+6.9% growth


+4.6% growth


TAKKT EUROPE TAKKT AMERICA

PROFITABILITY AT UPPER END OF TARGET CORRIDOR


EBITDA margin increased to 15.2% (14.8%),

adjusted for one-time earnings unchanged at 14.5% (14.5%)

133.7 122.8

137.3

157.3

171.3

14.2% 12.9%

14.0% 14.8% 15.2%

2012 2013 2014 2015 2016

EBITDA TAKKT Group in EUR million and margin in %

STABLE DEVELOPMENT OF ADJUSTED EBITDA MARGINS IN EUROPE;

IMPROVEMENT IN THE US


98.4

107.1

68.9

77.1

18.3% 19.0%

13.1% 13.7%

2015 2016 2015 2016

EBITDA in EUR million and margin in %

TAKKT EUROPE TAKKT AMERICA

Adjusted margin at 18.2% (18.3%) Adjusted margin at 13.0% (12.5%)

HIGH CASH FLOW MARGIN


114.2

125.6

10.7% 11.2%

2015 2016

TAKKT cash flow in EUR million and margin in %

in EUR million 2015 2016

profit 81.0 91.4

+ depreciation +28.0 +29.2

+ deferred taxes +5.2 +5.0

TAKKT CF 114.2 125.6

in EUR million 2015 2016

EBITDA 157.3 171.3

- net interest exp. -9.5 -9.5

- current taxes -33.6 -36.2

TAKKT CF 114.2 125.6

SIGNIFICANT INCREASE IN TAKKT CASH FLOW AND FREE CASH FLOW


in EUR million 2012 2013 2014 2015 2016

TAKKT cash flow 92.7 83.4 98.7 114.2 125.6

Change of net working capital as well as other

adjustments 10.6 -5.7 2.5 -26.9* -8.9

Cash flow from operating activities 103.3 77.7 101.2 87.3 116.7

Capital expenditure in non-current assets -8.5 -9.6 -13.6 -14.2 -17.4

Proceeds from disposal of non-current assets 0.5 0.3 0.5 0.3 0.5

Proceeds from the disposal of consolidated

companies 0.0 0.0 0.0 16.1 1.6

Free TAKKT cash flow 95.3 68.4 88.1 89.5 101.4

*Includes a partial amount of EUR 16.2 million from the payment made for the remaining purchase liability for GPA.

AGENDA


BUSINESS MODEL

STRATEGY

VALUE-BASED FIGURES

KEY FINANCIALS 2016

OUTLOOK 2017

GROWTH IN SECOND HALF OF THE YEAR IMPACTED BY INCREASED

UNCERTAINTY ALSO DUE TO BREXIT AND US ELECTION


Organic growth 2015 Q1/16 Q2/16 Q3/16 Q4/16 2016

TAKKT Group +4.7% +5.7% +9.9% +2.8% +3.0% +5.2%

TAKKT EUROPE +0.7% +1.6% +10.9% -0.9% +2.9% +3.5%

TAKKT AMERICA +10.0% +10.8% +8.9% +6.0% +3.1% +7.0%

OUTLOOK FOR 2017


weaker

economy main scenario

stronger

economy

GDP growth rates compared to 2016 unexpectedly

weak

Europe: slightly lower

US: higher

unexpectedly

strong

Organic sales growth lower 2 - 5% higher

• Stable gross profit margin at TAKKT AMERICA; slight decrease at TAKKT EUROPE.

• In the expected business environment, due to implementation of digital agenda,

the EBITDA margin should be in the middle range of the target corridor of 12 -15%.

• If the business environment is worse than expected, an EBITDA margin of the

Group in the lower half of the target corridor cannot be ruled out. In the event that

business performance surpasses predictions, the stronger growth could have a

positive impact on the EBITDA margin.

TAKKT EQUITY STORY AT A GLANCE


1

2

3

4

5

6

38.5% 40.5% 41.3% 43.3% 42.6%

1999 2003 2007 2011 2016

Gross profit margin > 40% (target)

Strong historic performance

Reliable dividend payouts (in EUR)

Profitable growth with ca. 10% average annual growth and

EBITDA margin 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

Group companies are market-leaders in attractive market

niches with high margins

TAKKT is a worldwide, diversified portfolio of B2B direct-

marketing specialists for business equipment

Growth opportunities through organic initiatives (multi-channel

plus and digitalization) as well as upside from acquisitions

7 Built-in approach to sustainability as a competitive advantage

11.2% 11.2% 14.4% 14.2% 15.2%

1999 2003 2007 2011 2016

EBITDA margin 12-15% (target)

7.4% 7.3% 10.3% 10.3% 11.2%

1999 2003 2007 2011 2016

TAKKT cash flow margin > 8% (target)

0.85 0.32 0.32 0.32 0.50 0.55

2011 2012 2013 2014 2015 2016

Dividend EPS

1.01 1.02

0.80

1.00 1.24 1.39

TAKKT INVESTOR RELATIONS


Christian Warns / Benjamin Bühler

Phone: +49 711 3465-8222 / -8223

Fax: +49 711 3465-8100

e-mail: [email protected]

www.takkt.com

TAKKT AG is headquartered in Stuttgart, Germany.

IR Contact Upcoming Events

March

28.-30.03. Spring roadshow

April

06.04. Bankers‘ Day

27.04. Q1 results

May

10.05. Shareholders‘ Meeting

22.-24.05. Berenberg Tarrytown Conference (USA)

Basic data TAKKT share

ISIN / WKN DE0007446007 / 744600

Ticker symbol 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

Oddo Seydler Bank

Kepler Capital Markets

Hauck & Aufhäuser

Historic share price development (Xetra)

TAKKT AG

mailto:[email protected]

http://www.takkt.com/

THANK YOU FOR YOUR KIND ATTENTION


Documents

ROADSHOW MARCH 2017 - TAKKT€¦ · OUR MULTI-CHANNEL STRATEGY OFFERS MULTIPLE TOUCH POINTS FOR OUR CUSTOMERS ACCORDING TO INDIVIDUAL PREFERENCES ... e-commerce and digitalization