Takkt AG · XETR:TTK
Takkt — TAKKT Analyst Conference 2017
44 slides from Takkt's conference presentation, Mar 22, 2017
Slide 1: Analyst Conference 2017
TAKKTAG ANALYST CONFERENCE 2017
Slide 2: Agenda
AGENDA STRATEGY FINANCIAL YEAR 2016 OUTLOOK 2017 Analyst conference | March 22, 2017 2
Slide 3: TAKKT is a portfolio of B2B direct marketing specialists
TAKKT IS A PORTFOLIO OF B2B DIRECT MARKETING SPECIALISTS Analyst conference | March 22, 2017 3
Slide 4: TAKKT America reorganized into four divisions to better support further growth
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 Analyst conference | March 22, 2017 4
Slide 5: Strong business model with clearly defined financial targets
STRONG BUSINESS MODEL WITH CLEARLY DEFINED FINANCIAL TARGETS Organic growth of 4 to 5% p.a. Growth of 5% p.a. on average on average via acquisitions • Efficiency of direct marketing • Well-established B2B market leaders in attractive market niches • Implementation of multi-channel PLUS • Access to n
Slide 6: Organic growth above GDP also due to efficiency of direct marketing model
ORGANIC GROWTH ABOVE GDP ALSO DUE TO EFFICIENCY OF DIRECT MARKETING MODEL higher average order value Store-based Direct business: marketing: ~ 70-90% ~10-30% lower average order value Total market volume of EUR 100bn+ consolidated fragmented with growth potential in line with GDP supplier supplier b
Slide 7: 2 major initiatives to adapt to changing customer needs
2 MAJOR INITIATIVES TO ADAPT TO CHANGING CUSTOMER NEEDS From 2013 MULTI-CHANNEL • Transformation of the business model • Integrated use of 4 marketing and sales channels print, online, tele and field From 2016 • Digitalization changes the purchasing behavior of customers and their order fulfillment
Slide 8: Dynamic: objectives have mostly been reached in 2016
DYNAMIC: OBJECTIVES HAVE MOSTLY BEEN REACHED IN 2016 Objectives KPIs 2013 2014 2015 2016 2016 Share of new products 20-25 3.0% 9.0% 16.5% 17.8% in order intake percent Share of private labels 20-25 Procurement 13.9% 14.7% 15.9% 18.3% in order intake percent Share of direct imports 10-15 9.6% 10.0% 1
Slide 9: Digitalization: Our approach
DIGITALIZATION: OUR APPROACH Analyst conference | March 22, 2017 9
Slide 10: Digitalization: Our vision 2020
DIGITALIZATION: OUR VISION 2020 We want to double our We strive to transform our e-commerce business organization in a step until 2020 by creating an change by putting digital outstanding customer first and focusing on experience through customer centricity. digitalization. We will invest up to The
Slide 11: Our 6 focus areas of the digital agenda
OUR 6 FOCUS AREAS OF THE DIGITAL AGENDA Strategy & Innovation Customer Decision Journey We strictly align our business We would like to learn more model with the digital age about and understand our and take a critical look at the customers’ needs and decision status quo. making processes better. Pr
Slide 12: We will invest up to EUR 50 million until 2020 for digital agenda
WE WILL INVEST UP TO EUR 50 MILLION UNTIL 2020 FOR THE IMPLEMENTATION OF OUR DIGITAL AGENDA 2017 2018 2019 2020 opex 10 m 5m 5m 5m capex 10 m 5m 5m 5m personnel We will recruit up to 100 additional talents Analyst conference | March 22, 2017 12
Slide 13: Digital agenda: example TAKKT investment company
Strategy & DIGITAL AGENDA: EXAMPLE TAKKT INVESTMENT COMPANY Innovation TAKKT investment company (TBG) First investments in 2016 Aim Getting access to innovative and digital business models, new product ideas and visionary founders. Business model Digital printing of professional transport Targets pa
Slide 14: Digital agenda: example implementation of Prüfplaner
DIGITAL AGENDA: Strategy & EXAMPLE IMPLEMENTATION OF PRÜFPLANER Innovation Design thinking process: Development of ideas Consistent focus on the customers’ needs. Prüfplaner helps customers to maintain an More than 80 customer interviews conducted overview of the legal requirements and issue o
Slide 15: Digital agenda: example implementation of Prüfplaner
DIGITAL AGENDA: Strategy & EXAMPLE IMPLEMENTATION OF PRÜFPLANER Innovation Analyst conference | March 22, 2017 15
Slide 16: Digital agenda: example new Hubert.com webshop
Technology 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 t
Slide 17: Digital agenda: example innovative work environments
DIGITAL AGENDA: EXAMPLE INNOVATIVE WORK Organization, Management ENVIRONMENTS and Corporate Culture Creating state-of-the-art work environments to further develop our corporate culture and promote broader collaboration and knowledge sharing Aim • Creating innovative work environments to new ways of
Slide 18: Digital agenda: Digital Entrepreneurship rotational program
DIGITAL AGENDA: DIGITAL ENTREPRENEURSHIP Organization, Management ROTATIONAL PROGRAM and Corporate Culture With the international trainee program „Digital Entrepreneurship“ TAKKT wants to recruit and train talent at an early stage 7 participants from Europe and the US getting 18 months of top traini
Slide 19: Digital agenda is the next strategic move to increase midterm organic growth
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.
Slide 20: M&A activity as further driver for growth
M&A ACTIVITY AS FURTHER DRIVER FOR GROWTH Acquisition criteria Divestment criteria • mainly medium-sized companies (and also • strategic fit smaller ones as add-on acquisitions) • growth potential • high EBITDA and gross margins • profitability expectations • well established market leaders • ensure
Slide 21: Diversification of regions, customer groups & product ranges
DIVERSIFICATION OF REGIONS, CUSTOMER GROUPS & PRODUCT RANGES Balanced contributions to sales Low dependency from single Broad product portfolio – from two continents customer groups multi-purpose use Regions Customer groups Product ranges 1.7 % 14.4 % Others 1.0 % 16.7 % 48.4 % 28.1% Sales Promotion
Slide 22: Role model for sustainability in our industry
ROLE MODEL FOR SUSTAINABILITY IN OUR INDUSTRY Examples: Percentage of sales from sustainable product ranges 2011 1.7% +576% 2016 9.6% Paper consumption per EUR million sales in t 2011 34.9 - 61% 2016 13.7 Sustainability update informs about the current status of the sustainability indicators; new lo
Slide 23: Agenda
AGENDA STRATEGY FINANCIAL YEAR 2016 OUTLOOK 2017 Analyst conference | March 22, 2017 23
Slide 24: Financial highlights 2016
FINANCIAL HIGHLIGHTS 2016 • Reported Group sales up by 5.8 percent to EUR 1,125.0 (1,063.8) million; organic growth of 5.2 percent slightly higher than guided one year ago. • E-Commerce share now stands at 39.0% (36.5%), e-commerce sales growth of 13%. • EBITDA margin of 15.2 (14.8) percent slightly
Slide 25: Organic growth at the upper end of the initial guidance of three to five percent
ORGANIC GROWTH AT THE UPPER END OF THE INITIAL GUIDANCE OF THREE TO FIVE PERCENT Sales TAKKT Group in EUR million 1,125.0 1,063.8 952.5 980.4 939.9 2012 2013 2014 2015 2016 +5.8% growth +5.2% organic growth Analyst conference | March 22, 2017 25
Slide 26: Strong growth especially from the US, solid sales performance in Europe
STRONG GROWTH ESPECIALLY FROM THE US, SOLID SALES PERFORMANCE IN EUROPE Sales in EUR million TAKKT EUROPE TAKKT AMERICA 563.3 562.0 538.3 525.8 2015 2016 2015 2016 +4.6% growth +6.9% growth +3.5% organic growth +7.0% organic growth Analyst conference | March 22, 2017 26
Slide 27: Growth in second half impacted by increased uncertainty due to Brexit and US election
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
Slide 28: E-commerce with very good growth
E-COMMERCE WITH VERY GOOD GROWTH Share of e-commerce in order intake in % Split between e-commerce channels 14.5% 39.0% 9.2% multi-channel 36.5% e-procurement 30.1% 28.0% 25.7% 2016 15.3% 2012 2013 2014 2015 2016 web-focused Analyst conference | March 22, 2017 28
Slide 29: Stable gross profit margin
STABLE GROSS PROFIT MARGIN Gross profit margin in % 43.3% 43.6% 42.6% 42.6% 42.6% 2012 2013 2014 2015 2016 Positive impact from acquisitions; without acquisitions and divestments margin would have been 42.0% (42.2%) Analyst conference | March 22, 2017 29
Slide 30: Profitability at upper end of target corridor
PROFITABILITY AT UPPER END OF TARGET CORRIDOR EBITDA TAKKT Group in EUR million and margin in % 171.3 157.3 133.7 137.3 122.8 14.8% 15.2% 14.2% 14.0% 12.9% 2012 2013 2014 2015 2016 EBITDA margin increased to 15.2% (14.8%), adjusted for one-time earnings unchanged at 14.5% (14.5%) Analyst conference
Slide 31: Stable development of adjusted EBITDA margins in Europe; improvement in the US
STABLE DEVELOPMENT OF ADJUSTED EBITDA MARGINS IN EUROPE; IMPROVEMENT IN THE US EBITDA in EUR million and margin in % TAKKT EUROPE TAKKT AMERICA 107.1 98.4 77.1 68.9 18.3% 19.0% 13.1% 13.7% 2015 2016 2015 2016 Adjusted margin at 18.2% Adjusted margin at 13.0% (12.5%) Analyst conference | March 22, 20
Slide 32: Significant increase in TAKKT cash flow and free cash flow
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 10.6 -5.7 2.5 -26.9* -8.9 adjustments Cash flow from operating activities 103.3 77.7 101.2 87.3 116.7 Capital e
Slide 33: Strong decrease in net financial liabilities
STRONG DECREASE IN NET FINANCIAL LIABILITIES Net financial liabilities in EUR million 324.9 273.0 244.0 217.5 177.5 2012 2013 2014 2015 2016 Free, committed credit lines of EUR 186 million Analyst conference | March 22, 2017 33
Slide 34: Very solid balance sheet
VERY SOLID BALANCE SHEET Non-current assets in EUR million Equity in EUR million 735.6 729.9 537.8 473.4 2015 2016 2015 2016 Current assets in EUR million Liabilities in EUR million 244.1 490.8 228.6 436.2 2015 2016 2015 2016 Analyst conference | March 22, 2017 34
Slide 35: Equity ratio now at 55 percent, gearing improved to 0.3
EQUITY RATIO NOW AT 55 PERCENT, GEARING IMPROVED TO 0.3 Equity ratio in % Debt to equity ratio (gearing) 55.2% 1.1 49.1% 43.8% 39.0% 0.8 34.7% 0.6 0.5 0.3 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Analyst conference | March 22, 2017 35
Slide 36: Improvement of interest cover & debt repayment
IMPROVEMENT OF INTEREST COVER & DEBT REPAYMENT DUE TO STRONGER EARNINGS AND CASH FLOW Debt repayment in years Interest cover 3.6 18.3 14.4 2.5 2.2 2.2 9.5 9.8 1.6 6.4 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Analyst conference | March 22, 2017 36
Slide 37: Improved value-based KPIs
IMPROVED VALUE-BASED KPIS Return on capital employed in % TAKKT value added in EUR million 18.1% 16.5% 46.8* 15.7% 14.4% 38.3* 36.9* 38.3 12.5% 32.4 28.5 26.5* 18.0* 18.9 9.7 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 * Adjusted for amortization of intangible assets resulting from acquisition
Slide 38: Good development of key financial indicators
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
Slide 39: Proposal to increase dividend
PROPOSAL TO INCREASE DIVIDEND Dividend per share in EUR 0.55 0.50 0.32 0.32 0.32 2012 2013 2014 2015 2016* *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
Slide 40: Agenda
AGENDA STRATEGY FINANCIAL YEAR 2016 OUTLOOK Analyst conference | March 22, 2017 40
Slide 41: Outlook for 2017
OUTLOOK FOR 2017 weaker stronger main scenario economy economy unexpectedly Europe: slightly lower unexpectedly GDP growth rates compared to 2016 weak US: higher strong Organic sales growth lower 2 - 5% higher • Stable gross profit margin at TAKKT AMERICA; slight decrease at TAKKT EUROPE. • In the e
Slide 42: TAKKT equity story at a glance
TAKKT EQUITY STORY AT A GLANCE Strong historic performance TAKKT is a worldwide, diversified portfolio of B2B direct- Gross profit margin > 40% (target) 1 marketing specialists for business equipment 38.5% 40.5% 41.3% 43.3% 42.6% Group companies are market-leaders in attractive market 2 niches with
Slide 43: TAKKT Investor Relations
TAKKT INVESTOR RELATIONS IR Contact Upcoming Events March Christian Warns / Benjamin Bühler 28.-30.03. Spring roadshow Phone: +49 711 3465-8222 / -8223 Fax: +49 711 3465-8100 April e-mail: investor@takkt.de 06.04. Bankers‘ Day 27.04. Q1 results www.takkt.com May TAKKT AG is headquartered in Stuttgar
Slide 44: Thank you for your kind attention
THANK YOU FOR YOUR KIND ATTENTION Analyst conference | March 22, 2017 44