Dear shareholders, TAKKT highlights during the first six months of The TAKKT group. Half-year report 2001

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1 Half-year report 2001 Stuttgart, July 2001 Dear shareholders, TAKKT AG continued its dynamic development during the first six months of Compared to the same period last year, the group increased its turnover by 17.5 percent to EUR (364.8) million. To a large extent, this was due to the first-time consolidation of US mail order supplier Hubert, a company acquired by TAKKT in Furthermore, KAISER + KRAFT EUROPA made a major contribution to the group s growth. Traditionally, TAKKT s most important supporting division increased its turnover by 13.0 percent. Encouraged by these results, KAISER + KRAFT EUROPA continues its expansion course: By establishing new operating companies in Poland, Portugal and Ireland, the company is developing promising new markets for business equipment. This strong market position in Europe allowed the group to compensate for the impacts of the increasingly weaker economy in the United States. TAKKT highlights during the first six months of 2001 During the first six months of 2001, the TAKKT group increased its turnover by 17.5 percent to EUR (364.8) million. The EBITDA increased by 9.9 percent to EUR 34.3 (31.2) million. The acquisition and successful integration of the US-based Hubert company significantly strengthened the group s overall portfolio. Topdeq USA successfully launched its operating business. As of the beginning of this year, C&H Distributors has been offering classic American office furniture nationwide. KAISER + KRAFT EUROPA is expanding: An operating company was established in Portugal, while KWESTO Poland started its business in Wroclaw. Catalogues were mailed to Ireland for the first time in June of By deciding to expand warehousing capacities in Pfungstadt, Topdeq allows for the exhaustion of the existing growth potential in Europe. Topdeq s new interactive Web page received an award. At this point, all TAKKT groups have their own secondgeneration websites on the Internet. The TAKKT group Compared to the same period last year, group turnover increased by 17.5 percent to EUR (364.8) million. Adjusted for the takeover effects, group turnover was up 3.9 percent to EUR million. Adjusted for currency exchange rate effects, organic growth was 1.3 percentage points. In part, the very good performance of KAISER + KRAFT EUROPA compensated for the weaker business development in the United States. Taking into account the economic forecast for Europe, the TAKKT group sees a positive overall development and is expecting over 10 percent increase in turnover for the financial year TURNOVER TAKKT GROUP HALF-YEAR in Million Euro

2 2 Half-year report 2001 TAKKT group results Once more, the stable price development during the past few months has ensured a stable gross profit margin: During the first six months of 2001, the gross profit margin increased from 38.4 to 39.3 percent. Compared to the same period last year, the operating result (EBITDA, earnings before interest, taxes, depreciation and amortisation) was up 9.9 percent to EUR 34.3 (31.2) million during the first six months of Compared to the turnover increase of 17.5 percent, the lower EBIT- DA growth was due to start-up costs for the newly established companies of Topdeq USA, KAISER + KRAFT Portugal and KWESTO Poland as well as expenses for the first-time catalogue mailing in Ireland and business slowdown in the United States and at Topdeq. The development of the EBITDA margin illustrates the stability of the group s margins: The EBITDA margin changed only slightly from 8.6 percent during the same period last year to 8.0 percent. An EBITDA margin of at least 10.5 percent is expected for the entire financial year. The EBIT (earnings before interest and taxes) was EUR 19.4 million as compared to EUR 22.2 million last year. However, due to the takeover of Hubert these two figures and any subsequent key figures are not directly comparable. For the acquisition, a goodwill depreciation of EUR 4.9 million was posted. Earnings before taxes declined to EUR 8.5 (17.7) million, including interest charges of EUR 6.3 million for the acquisition of Hubert. The total cash flow during the first six months of 2001 was EUR 18.4 (19.3) million. KAISER + KRAFT EUROPA With a share in turnover of 47.1 percent, KAISER + KRAFT EUROPA, which comprises KAISER + KRAFT, Gaerner, Gerdmans and KWESTO, once again proved to be the group s strongest division during the first six months of This division continued its corporate growth and gained market shares at the expense of both wholesalers and retailers. The turnover of KAISER + KRAFT EUROPA was up Topdeq Turnover at Topdeq was down 4 percent to EUR 4 (41.6) million, contributing 9.3 percent to group turnover. However, with regard to this assessment it has to be taken into account that business development during the first two quarters of 2000 had been extraordinarily positive: Due to additional sales and marketing campaigns in connection with the 10-year anniversary of Topdeq Germany, turnover in 2000 had increased by 22.5 percent. In 2001, there was no occastion for repeating these special advertising measures. The strong uncertainty revolving around the New Economy also put a damper on the demand for office furniture with a modern design. Furthermore, there was an increasing number of competitors which copied Topdeq s successful concept. Despite the development during the first six months, Topdeq has considerable growth potential. Additionally, Topdeq USA had a good start in spite of the 13.0 percent to EUR (178.9) million. The company established a subsidiary in response to the strong business growth in Portugal. As planned, KWESTO Czech Republic served as the base for an expansion into other Eastern European countries. KWESTO Poland was established during the first six months of In addition, first KAISER + KRAFT catalogues were sent out in Ireland. With the establishment of its new locations, KAISER + KRAFT EUROPA intends to further advance its market penetration in Europe. Furthermore, KAISER + KRAFT will improve its delivery service following the expansion of the Kamp- Lintfort-based central warehouse. At the end of the first six months (30 June 2001), KAISER + KRAFT EUROPA had 894 employees (full-time equivalents). weak economy in the United States. Topdeq set the course for further pan-european growth by expanding its central warehouse in Pfungstadt. In addition, the Internet pages of Topdeq Germany are much noted and won several awards during the past few months. As a result, Topdeq will focus more strongly than before on the Internet as an additional distribution channel in the future. As of 30 June 2001, the group had 229 employees (full-time equivalents).

3 Half-year report K + K America The business development of K + K America with its subsidiaries C&H Distributors, Avenue Industrial Supply, Conney Safety Products and the newly acquired Hubert company was affected by the continuously deteriorating economy in the United States. Due to the first-time consolidation of Hubert, the turnover in US dollars increased by 21.0 percent to USD (138.6) million. As a result, K + K America contributed 43.6 percent to the overall turnover of the TAKKT group. Adjusted for the acquisition of Hubert, the overall turnover decreased by 11.1 percent. The acquisition of Hubert clearly shows that TAKKT s diversification strategy is beginning to pay off: K + K America was able to further reduce its exposure to the ups and downs of the economy because of Hubert. Among these, the business suppliers of specialities Hubert and Conney were less affected by cyclical developments than those of C&H Distributors, which focuses on business and warehouse equipment. At the end of the first six months of 2001, the company had 826 employees (fulltime equivalents). The TAKKT share During the first six months of the financial year, the share of TAKKT AG was not quite able to buck the general trend at the stock exchange. With a market capitalisation of about EUR 500 million, the company continues to be one of the SDAX heavyweights. The average daily trading volume of 15,000 shares offers sufficient liquidity even for institutional investors. The future development of the TAKKT share will strongly depend on how investors assess the economic development in Europe and the United States. The investor relations communications of TAKKT AG highlights the company s sustained growth strategy and points out the group s continuously positive business results. This has resulted in an increased interest on the part of analysts, who published four reports on TAKKT AG during the first six months of the year. The group presented itself to institutional investors during road shows in Paris, London and Frankfurt and to private investors during an event organised together with the Stuttgart stock exchange. TAKKT AG is an active member of BWSC (Baden-Württemberg Small Caps) an interest group of twelve public companies from the state of Baden-Württemberg. The goal of this association is to increase the attractiveness of the companies in the capital market especially for private investors through joint activities and active communication. PERFORMANCE OF THE TAKKT SHARE since initial listing Euro TAKKT share SDAX (indexed) Source: XETRA

4 Consolidated Profit and Loss Account 4 Annual general meeting In May of 2001, the chairman presented record figures for financial year 2000 to some 500 participants attending the second annual general meeting of TAKKT AG in Stuttgart. The shareholders voted in favour of the administration on all agenda items, including a proposal to expand the supervisory board from six to nine members. The newly elected supervisory board members are Günter Hülse, chairman of the management board of major shareholder Franz Haniel & Cie; Dr. Klaus Trützschler, member of the management board of Haniel; and Walter Flammer, organisations director at KAISER + KRAFT EUROPA. I CONSOLIDATED PROFIT AND LOSS ACCOUNT 1. Turnover 2. Decrease in stocks of finished goods and work-in-progress Own work capitalised 3. Cost of sales 4. Gross profit 5. Other income 6. Personnel expenses 7.a Amortisation of goodwill 7.b Depreciation of other intangible and tangible assets 8. Operating taxes 9. Other operating expenses 10. Net financial result 11. Profit before tax 12. Taxes on income 13. Net income Earnings per share in EUR Number of shares in million 5 4 EBIT EBITDA Average no. of employees ( full-time equivalent) 1,966 1,589 TAKKT AG ZA Finanzen/Investor Relations Neckartalstrasse 131 D Stuttgart Phone +49 (0) Fax +49 (0) investor@takkt.de

5 5 Consolidated Balance Sheet of TAKKT AG I ASSETS A. Fixed assets I. Intangible assets II. Tangible assets III.Financial assets B. Current assets I. Stocks II. Trade and other debtors III.Cash and bank balances C. Prepayments I EQUITY AND LIABILITIES A. Shareholders equity I. Issued capital II. General reserves III. Retained earnings IV. Minority interests B. Provisions C. Liabilities D. Deferred income Employees (full-time equivalent) at fixed date 1,972 1,931

6 Group Source and Application of Funds 6 I GROUP SOURCE AND APPLICATION OF FUNDS Net income (incl. minority interests) Fixed assets depreciation Increase in provisions Other expenditure/profits not affecting the movement of funds Profit/loss from the disposal of fixed assets Decrease in stocks Increase/Decrease in trade debtors and other assets not part of investment and financing activities Increase of trade liabilities and other liabilities not part of investment and financing activities Net cash flow from operations Proceeds from disposal of tangible and intangible assets Investment in tangible and intangible assets Net cash flow from investment activities Decrease of gross financing liabilities Payments to owners and minority interests (dividends) Other changes in shareholders' equity Net cash flow from financing activities Net change in funds Change in funds arising from exchange differences Funds at the beginning of the period Funds at the end of the period Funds are the sum of cheques, cash and bank balances. The preceding figures have been prepared in accordance with the requirements of the German Commercial Code ( HGB ). For further details see our Annual Report 2000, p. 44f. Chairman of the Supervisory Board: Dr. Dieter Schadt Management Board: Georg Gayer, Alfred Michael Milanello, Franz Vogel, Dr. Felix A. Zimmermann Headquarters: Stuttgart HRB: 19962