TAKKT STRENGTHENS RESILIENCE IN THE FIRST QUARTER

• Free cash flow increases to EUR 21.3 (14.5) million
• Gross profit margin improved to 41.2 (40.0) percent
• Organic sales growth of minus 16.5 percent
• Adjusted EBITDA margin at 7.4 percent, implementation of structural cost reductions

Stuttgart, Germany, April 25, 2024. TAKKT continues to work intensively on strengthening its resilience in a persistently challenging environment. In the first quarter, the Group achieved good results in optimizing cash generation, strengthening the gross profit margin, and making structural cost adjustments. Demand in the first quarter of the new year was characterized by continued weak conditions in the markets relevant to TAKKT. "In discussions with our B2B customers, we continue to see a great deal of restraint and uncertainty. Many companies are reducing their costs, investments, and staff. We expected a difficult start to the new year. This has been confirmed," says CEO Maria Zesch. Sales reached EUR 269.0 (321.8) million. Organic sales growth amounted to minus 16.5 percent. It was impacted by three percentage points due to the discontinuation of the Certeo business in the previous year and negative working day effects. While the I&P and OF&D divisions performed at a comparable level to the final quarter of 2023, the FoodService business saw a much sharper decline. In addition to a persistently weak market environment, temporary effects out of the harmonization of ERP systems and significantly lower project business contributed as well.

All three divisions improved their gross profit margin in the first quarter. For the Group, this signified an increase to 41.2 (40.0) percent, which was due to lower costs for inward freight and improved purchasing conditions. "With our business model we are in a resilient position, especially in times of crisis. In addition to the high gross profit margin, strict cost management also contributes to this. In the first quarter, we intensified the adjustment of our personnel structure by consistently adapting the number of employees to the lower demand. The resulting savings will significantly reduce our personnel costs in the coming months," says CFO Lars Bolscho. In the first quarter, the resulting one-time expenses had a negative impact on reported earnings. EBITDA amounted to EUR 16.8 (30.2) million and was impacted by one-time expenses amounting to EUR 3.0 (0.6) million. The adjusted EBITDA margin was at 7.4 (9.6) percent.

Another important pillar for TAKKT’s resilience is strong cash flow. Despite the lower EBITDA, the Group generated a significantly higher free cash flow of EUR 21.3 (14.5) million in the first quarter. "Following the already significant reduction in net working capital last year, we were able to free up an additional EUR 14.3 million due to very active inventory management, amongst other. We are also working on further improvements in the cash conversion cycle," Lars Bolscho continues.

After a difficult start to the new financial year, TAKKT expects organic growth to increase over the course of the year. "Demand remains subdued at present. While the indicators relevant to us continue to point to negative growth rates, most forecasts for the eurozone expect GDP growth to improve in the second half of the year. In addition, the basis for comparison will then be significantly lower. We therefore continue to expect a gradual recovery in demand from quarter to quarter," says CEO Zesch. "And we are continuing to work on our strategic topics. At the beginning of the year, we took a major step towards integrating Central and Hubert by harmonizing our IT systems in the FoodService division. In May, we will have completely migrated ratioform's customers to kaiserkraft in the I&P division and discontinue ratioform's independent brand presence. Both of these steps will contribute to our success in the long term but will also bring temporary challenges and have negative effects on our sales development." TAKKT will evaluate and continuously implement further measures to manage its cost structures. In addition to further one-time expenses, this will lead to an increasing reduction in the cost base over the course of the year. "We confirm our forecast of an adjusted EBITDA margin of 8.0 to 9.5 percent for the full year and expect profitability to improve gradually over the course of the year," says CFO Bolscho.

Earnings Call: April 25, 2024 at 2pm (CEST)

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Financial calendar
TAKKT will publish the figures for the first half year on July 25, 2024.

IFRS figures for the TAKKT Group as of the end of the first quarter 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 listed on the SDAX and is represented in the Prime Standard of the German Stock Exchange.

Contacts
Benjamin Bühler    phone 23
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