roadshow march 2017 - takkt€¦ · our multi-channel strategy offers multiple touch points for our...
TRANSCRIPT
ROADSHOW MARCH 2017
AGENDA
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BUSINESS MODEL
STRATEGY
VALUE-BASED FIGURES
KEY FINANCIALS 2016
OUTLOOK 2017
TAKKT IS A PORTFOLIO OF B2B DIRECT MARKETING SPECIALISTS
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TAKKT AMERICA REORGANIZED INTO FOUR DIVISIONS TO BETTER
SUPPORT FURTHER GROWTH
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BEG: Business Equipment Group; PSG: Packaging Solutions Group; MEG: Merchandising Equipment Group
REG: Restaurant Equipment Group; DPG: Displays Group; OEG: Office Equipment Group
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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
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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
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• 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
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BUSINESS MODEL
STRATEGY
VALUE-BASED FIGURES
KEY FINANCIALS 2016
OUTLOOK 2017
STRONG BUSINESS MODEL WITH CLEARLY DEFINED FINANCIAL
TARGETS
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
Organization, Management
and Corporate Culture
DIGITAL AGENDA: DIGITAL ENTREPRENEURSHIP
ROTATIONAL PROGRAM
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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
Organization, Management
and Corporate Culture
DIGITAL AGENDA IS THE NEXT STRATEGIC MOVE TO INCREASE OUR
MIDTERM ORGANIC GROWTH
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• 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
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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
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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
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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
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BUSINESS MODEL
STRATEGY
VALUE-BASED FIGURES
KEY FINANCIALS 2016
OUTLOOK 2017
GOOD DEVELOPMENT OF KEY FINANCIAL INDICATORS
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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
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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
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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
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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
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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
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538.3 563.3
525.8
562.0
2015 2016 2015 2016
Sales in EUR million
+6.9% growth
+7.0% organic growth
+4.6% growth
+3.5% organic growth
TAKKT EUROPE TAKKT AMERICA
PROFITABILITY AT UPPER END OF TARGET CORRIDOR
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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
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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
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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
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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
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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
39 Roadshow | March 2017
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
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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
41 Roadshow | March 2017
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
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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
THANK YOU FOR YOUR KIND ATTENTION
43 Roadshow | March 2017