EQS-News: TAKKT generates strong free cash flow and further stabilizes sales development in the fourth quarter

TAKKT generates strong free cash flow and further stabilizes sales development in the fourth quarter
 

• TAKKT achieves upper end of forecast for sales, profitability and free cash flow
• Management Board proposes dividend payment of EUR 0.60 per share
• Further improvements in organic growth and slight increase in adjusted EBITDA margin expected for 2025
• Capital Markets Update on strategic realignment on March 27

Stuttgart, Germany, February 13, 2025. With an improved final quarter and further stabilization of organic growth, TAKKT reached the upper end of the guidance which was adjusted in October. Based on preliminary figures, organic growth in 2024 was minus 15.4 percent and the EBITDA margin adjusted for one-time expenses was 6.9 (2023: 9.1) percent. Due to focused measures to improve cash flow, the Group was able to release considerable liquidity from the reduction in net working capital, particularly at the end of the year. Free cash flow was therefore significantly more stable than EBITDA and amounted to EUR 68.0 (74.0) million.

2024 was a year of major internal and external challenges for TAKKT. In addition to the weak economic market environment in Europe, the Group had to resolve several self-inflicted issues. These resulted from the temporary discontinuation of the ratioform brand, problems during the ERP migration at the FoodService (FS) division and ineffective positioning of the NBF brand. "We made very good progress in the second half of the year in solving the internal challenges and thus laid the foundation for the improvement in business development in recent months. What matters now is to win back customers and rebuild trust. We are already seeing good results, but we still have a journey ahead of us," says CEO Andreas Weishaar.

In the final quarter, organic growth was at minus 11.5 percent and therefore slightly better than in the previous quarter. The Industrial & Packaging (I&P) division continued its recovery from the third quarter, while the Office Furniture & Displays (OF&D) division benefited from the targeted conversion of orders for which delivery had been delayed due to limited product availability and was also able to stem the decline in sales. FS had processed a large number of project orders in the previous quarter, which meant that organic sales development was lower than in the third quarter, while order intake improved. TAKKT anticipated negative effects on the gross profit margin in the final quarter. The margin decreased to 36.6 (39.9) percent at Group level. The decline is due to effects from freight, the conversion of bid contract orders, inventory valuation and price adjustments to sell off inventories and improve growth. These are largely non-recurring, but in some cases will continue to weigh on the gross profit margin at the beginning of the current year. The significantly lower gross profit margin led to a decline in the adjusted EBITDA margin to 4.6 (8.3) percent in the final quarter.

In the full year 2024, sales amounted to EUR 1,052.9 (1,240.0) million with a gross profit margin of 39.3 (39.8) percent. When managing expenses, TAKKT ensured an appropriate balance between cost management and investments in the business model. Adjusted for one-time expenses for structural adjustments, marketing and personnel costs as well as other costs fell noticeably. As a result of the weak sales development and one-time expenses of EUR 17.1 (1.4) million, reported EBITDA declined to EUR 55.7 (111.9) million. In view of the negative business development of the US FoodService activities, TAKKT has recognized an impairment loss of EUR 63 million at the Cenbert cash generating unit. This has no impact on cash flow, but reduces EBIT by the corresponding amount.

"We cannot be satisfied with last year's business development. However, despite the noticeably lower result, we generated a free cash flow that is only slightly below that of the previous year thanks to the reduction in inventories and improvements in payment terms. Together with our very solid balance sheet structure, this allows us to continue our reliable dividend policy and propose the payment of a base dividend of EUR 0.60 for 2024 while investing in our business model and future growth," says CFO Lars Bolscho.

At the beginning of the new year, the positive trend of the second half of the year continued in the development of order intake. TAKKT expects the economic conditions to remain difficult in 2025. The risk of an escalation in global trade conflicts is leading to a high degree of uncertainty. "Despite the unchanged challenging conditions, we expect a gradual improvement in organic sales development and positive growth rates in the later quarters of 2025 due to the increasingly positive effects of our measures to increase sales. We expect a slight improvement in the adjusted EBITDA margin compared to the previous year," Bolscho continued. TAKKT will invest more heavily than in recent years in growth and in improving systems and processes. Through further structural improvements to the cash conversion cycle, the Group intends to release additional liquidity from the reduction of net working capital, albeit to a lesser extent than in the previous year due to the expected growth. Together with the slightly higher investments in the business, this will result in a free cash flow that will be lower than in 2024.

For several months, the TAKKT Management Board has been working closely with the Supervisory Board on a strategy process to revise the long-term positioning and targets. "We want to sustainably strengthen shareholder value and have specifically addressed three questions. Firstly, how do we organize and focus our portfolio and how do we strengthen our core business around the I&P division? Part of this is also the discontinuation of small and less profitable activities. At the end of the year, we therefore sold the MyDisplays activities in Germany and decided not to continue the bid contract business in the FS division. Secondly, how can we increase our organic growth through a more customer-oriented approach and benefit from our strong brands and our omnichannel approach? And thirdly, how do we realize the potential that arises from automation and harmonization, artificial intelligence, scaling and streamlining the organization faster and more consistently in order to further improve profitability and cash conversion?" says CEO Weishaar. TAKKT will publish and present detailed results of the strategic realignment and the objectives for the coming years together with the forecast for 2025 on March 27.

Earnings Call: February 13, 2025 at 2pm (CET)
To participate in the Earnings Call, please register in advance at the following link: Registration Earnings Call
Financial calendar
TAKKT will publish the annual report 2024 and hold a Capital Markets Conference on March 27, 2025.
Preliminary IFRS figures for the TAKKT Group 2024
(in EUR million)

About TAKKT AG

TAKKT AG is the leading omnichannel distributor for business equipment in Europe and North America. The Group is represented in more than 20 countries with its Industrial & Packaging, Office Furniture & Displays and FoodService divisions. The product range of the subsidiaries comprises more than 600,000 products for the areas of plant and warehouse equipment, office furniture, transport packaging, display articles and equipment for the food service industry, hotel market and retailers. The company is represented in the Prime Standard of the German Stock Exchange.

Contact
Benjamin Bühler    

phone +49 711 3465-8223
Email: investor@takkt.de