TAKKT AG — Interim / Quarterly Report 2003

Oct 30, 2003

Quarterly Report III/2003 of TAKKT AG

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Report for the first nine months of 2003

DEAR SHAREHOLDERS,

The economic environment has remained difficult in the first nine months of this year. Although the number of incoming orders was almost unchanged, turnover declined by 9.8 percent, mainly because of a lower average order value and the changes in exchange rates. The pre-tax profit performance of the TAKKT Group was also slightly lower compared to the previous year.

TAKKT HIGHLIGHTS IN THE FIRST NINE MONTHS OF 2003:

• Successful business start-ups in Japan, Mexico and Hungary

• Earnings margins stable as compared to the first nine months of the previous year

• Equity ratio increases to 30.5 percent

• Hubert mails its first non-food-retail catalogue in the USA

• Stock repurchase programme not used so far

• AXA reduces shareholding in TAKKT

THE TAKKT GROUP. Customers’ buying behaviour has been affected by the weak economy. The restraint on the part of our regular customers could not be offset in full by new customers. However, it clearly mitigated the effects of the economic weakness. As soon as the economy recovers, TAKKT will benefit from its larger customer base.

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Quarterly Report III/2003 of TAKKT AG

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----- Start of picture text ----- Turnover first nine monthsTAKKT Group in mill. Euro70060050040030020010002001 2002 2003----- End of picture text -----

» The strong changes in exchange rates, especially the weakness of the US dollar, as compared to the previous year have left their mark on the reported figures. Turnover declined by 9.8 percent to EUR 532.1 (590.2) million in the first nine months of the financial year. Adjusted for exchange rate effects, the decline would have amounted to only 1.7 percent. Given that the TAKKT companies in the individual currency areas have a similar profitability, the exchange rate fluctuations have had only a minor effect on group results.

» An analysis of the value and growth drivers shows why turnover has declined; while the number of orders remained almost unchanged, the average order value declined. In Germany, for instance, the order value declined by 4.5 percent in the first nine months of 2003, whereas the number of orders was down only 0.7 percent in the same period. The fact that both the established companies and the new companies were able to win new customers had a positive effect.

» For the remaining quarter TAKKT is expecting a moderate recovery of the economy. In accordance with some macro-economic indicators, which point to a turnaround, TAKKT recorded a pick up in business at the beginning of the fourth quarter. Both, the average order size and the number of orders are evaluated positive. As a result of the already implemented adjustments of capacities, TAKKT’s earnings will benefit directly at a recovery of the business development.

TAKKT GROUP RESULTS. At 40.5 (40.0) percent, the gross profit margin was slightly higher than in the first nine months of the previous year. This good percentage is the basis for the stable overall earnings figures of the TAKKT Group. KAISER + KRAFT EUROPA and K + K America made particularly strong contributions to the improved gross profit margin. While this is attributable to the further expansion of the warehouse business at KAISER + KRAFT EUROPA, K + K America saw turnover shares shift slightly in favour of the Hubert subsidiary, which has traditionally achieved higher gross profit margins. Also, due to the weak economy, hardly any division received discount-carrying large-scale orders.

» EBITDA (earnings before interest, taxes, depreciation and amortisation) were down 10.1 percent to EUR 57.9 (64.4) million. The absolute

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Quarterly Report III/2003 of TAKKT AG

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EBITA first nine months TAKKT Group in mill. Euro

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----- Start of picture text ----- 7060504030201002001 2002 2003----- End of picture text -----

Pre-tax profit first nine months TAKKT Group in mill. Euro

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----- Start of picture text ----- 4030201002001 2002 2003----- End of picture text -----

Cash flow first nine months TAKKT Group in mill. Euro

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decline is mainly attributable to the changes in exchange rates. By contrast, profitability remained unchanged. At 10.9 (10.9) percent, the EBITDA margin was on par with the same period of the previous year.

» Earnings before interest, taxes and amortisation (EBITA) decreased by 10.8 percent to EUR 50.5 (56.6) million, with a slightly diminished EBITA margin of 9.5 (9.6) percent. However, TAKKT sticks to its full-year EBITA margin target of 9 to 11 percent.

» Scheduled goodwill amortisation remained unchanged from the previous year. The changes shown are exclusively attributable to the weakness of the US dollar. Earnings before interest and income taxes (EBIT), were down 11.2 percent to EUR 38.1 (42.9) million. The margin decreased from 7.3 to 7.2 percent. At EUR 27.8 (29.2) million, the TAKKT Group’s pre-tax profit could not reach the result of the previous year. However, based on a slightly lower tax rate, earnings after taxes amounted to EUR 16.8 (16.7) million.

» At EUR 36.6 (38.2) million, cash flow was lower than in the first nine months of the previous year, due to the translation-related decline in reported depreciation.

» Start-up losses for the newly established companies were more or less on par with the previous year. Expenses - especially for catalogues - were in line with expectations. As in the previous quarter, the stable earnings performance was primarily the result of the adjustment of capacities to the expected business volume, which was initiated in 2002.

» Interest expense was down EUR 3.4 million on the same period of the previous year as the group benefited from reduced indebtedness and lower interest rates in the capital market. In the translation to the reporting currency, the weaker US dollar also had a positive effect on the interest result.

BALANCE SHEET OF THE TAKKT GROUP. The balance sheet as at September 30, 2003 is characterised by a further increase in the equity ratio and a consistent reduction in financial debt. The timely management of inventories and trade receivables as well as the cash flow again made a positive contribution to the overall situation. The equity ratio rose

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from 27.7 percent (December 31, 2002) to 30.5 percent (September 30, 2003).

» Thanks to the good cash flow, debt was reduced by EUR 18.7 million. TAKKT expects full-year repayments to be around EUR 30 million. Net financial debt was down EUR 15.1 million compared to December 31, 2002, due to the changes in exchange rates, especially the US dollar. On September 30, 2003, it amounted to EUR 251.2 million.

» In the first nine months of the financial year, TAKKT invested EUR 7.5 (7.5) million in the maintenance and expansion of its business operations. The bulk was invested in the construction of a further high-bay racking accommodating over 2,700 pallets in the mail order centre of KAISER + KRAFT EUROPA. The extension will be completed before the end of the year, enabling KAISER + KRAFT EUROPA to supply its customers with an even wider product range directly from its warehouse starting 2004. The investment ratio of 1.4 percent is on average for maintenance and expansion.

» Contingent liabilities remained unchanged from the last balance sheet date. No major incidents have occurred since the end of the reporting period.

KAISER + KRAFT EUROPA. At EUR 264.2 (273.2) million, the nine months turnover of KAISER + KRAFT EUROPA was down on the same period of the previous year. While the average order value declined, the number of orders remained unchanged. The situation differs from country to country, though. Customers’ purchasing restraint is particularly evident in Germany, the Netherlands and Great Britain. By contrast, Poland, the Czech Republic and Hungary reported a positive development. Building on its KAISER + KRAFT and KWESTO brands, the TAKKT Group is perfectly positioned to benefit from the EU accession of these countries. The good figures reported by KWESTO show that it was the right strategy to target these growth markets with a customised catalogue. The same applies to KWESTO Hungary, which was established in May of this year. KAISER + KRAFT EUROPA contributed 49.7 percent to the group’s nine months turnover.

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Quarterly Report III/2003 of TAKKT AG

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» The earnings position of KAISER + KRAFT EUROPA remains promising. The division generated EUR 40.0 (40.3) million in EBITA, so that the margin rose from 14.8 to 15.1 percent.

» Newly established KAISER + KRAFT Japan has lived up to the company’s expectations. Experience gained to date shows that the B2B mail order business model also works in the Japanese market. Both new business and customers’ repeat orders developed as planned; both figures are similar to those reported by other KAISER + KRAFT companies. The start-up losses of the new company have remained within budget.

TOPDEQ. The nine months turnover of the Topdeq Group declined by 9.3 percent to EUR 51.8 (57.1) million in the first nine months of the year, which means that the division contributed 9.7 percent to total group turnover. Adjusted for exchange rate effects, turnover was down only 5.5 percent. The decline was due to the continued difficult economic situation in Germany, Switzerland and the Netherlands. While the average order value dropped quite strongly in some cases, the number of incoming orders declined only moderately.

» Although turnover in the established markets declined, these Topdeq companies remain profitable. Their profits are insufficient, however, to offset the scheduled start-up losses of the new companies in France and the USA. The division’s EBITA amounted to EUR -2.8 (-0.7) million.

» The inventory management software adopted from KAISER + KRAFT EUROPA in the past year had a positive effect on processes and workflows within the Topdeq Group, making inventory management more efficient without compromising on the high service quality.

» Topdeq USA again delivered a promising performance, benefiting from the extension of its delivery radius to 48 hours and its successful internet presence. Acceptance of the internet as an ordering channel is particularly high among Topdeq’s US customers.

K + K AMERICA. In the first nine months of 2003, the companies of the K + K America Group generated USD 239.9 (240.4) million in turnover, down 0.2 percent on the same period of the previous year. Due to the

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Quarterly Report III/2003 of TAKKT AG

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changes in exchange rates, turnover in the reporting currency declined to EUR 216.1 (259.9) million, which means that the division contributed 40.6 percent to total group turnover. Given that the economic recovery in the USA appears to be mainly attributable to increased consumer spending, not all of the K + K America companies have benefited from this development. In the past months, however, the average order value increased slightly over the first nine months of the previous year. This trend as well as the overall economic indicators suggests that business should pick up in the course of the next six months.

» K + K America generated USD 20.8 (21.0) million in EBITA, so that the profit margin remains stable with 8.7 (8.7) percent.

» In August 2003, Hubert mailed its first catalogue to non-food retailers. The catalogue mainly contains sales promotion items. Roughly half of the products offered have been taken from the existing portfolio, while some 3,000 new articles have been added to the product range. The C&H company in Mexico continued its positive development, with the number of orders in line with our expectations.

THE TAKKT SHARE. TAKKT’s investor relations activities clearly intensified in recent months, not least in view of the AXA convertible bond, which will mature on November 12, 2003. As of this date, the TAKKT shares held by the AXA Group will be transferred to a large number of investors. AXA will fulfil the conditions of the convertible bond issued in March 1998. In August and September of this year, AXA already sold all TAKKT shares not required for conversion. Once the conversion has been completed, the free float will increase to 31.3 percent. AXA will then no longer hold any TAKKT shares.

» In the run-up to the conversion of the AXA bond, the TAKKT management will go on an extensive European road show targeting potential investors interested in a long-term investment in TAKKT. In this context, management will inform more than 30 investors about the current course of business and the group’s strategy. So far, no share price risks have been identified for the TAKKT share in conjunction with the convertible bond.

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Quarterly Report III/2003 of TAKKT AG

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» The 2002 dividend of EUR 0.10 per share resolved at the Annual General Meeting was paid out to the shareholders on May 7, 2003. As of September 30, 2003, no use had been made of the stock repurchase programme approved by the Annual General Meeting in conjunction with the AXA convertible bond.

» The preliminary figures for the full financial year 2003 will be published on February 17, 2004.

Performance of the TAKKT share, 52 weeks comparison

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----- Start of picture text ----- Euro4.804.003.2010/02 12/02 02/03 04/03 06/03 08/03 10/03TAKKT share SDAX (indexed) Source: XETRA----- End of picture text -----

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Quarterly Report III/2003 of TAKKT AG

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Consolidated Profit and Loss Account

(in EUR million)

Q3	Q3	Q3
01.07.2003-30.09.2003-	01.07.200230.09.2002	01.01.2003-30.09.2003-
Turnover171.3	191.1	532.1
Changes in inventories of finished goods andwork inprogress0.0	- 0.2	0.0
Own fixed assets capitalised0.1	0.0	0.1
171.4Cost of sales102.4	190.9	532.2
	114.9	316.9
Grossprofit69.0	76.0	215.3
Other income2.5	1.2	6.1
Personnel expenses23.5	24.6	71.3
Amortisation ofgoodwill4.1	4.4	12.4
Depreciation of other intangible and tangibleassets2.4	2.5	7.4
Other operatingexpenses29.7	31.0	92.2
Financial result- 3.2	- 4.4	- 10.3
Profit before tax8.6	10.3	27.8
Income taxes3.8	4.9	11.0
Net income before minority interest4.8	5.4	16.8
Minorityinterest0.1	0.1	0.5
Net income4.7	5.3	16.3
Earningsper share in EUR0.06	0.07	0.22
Number of issued shares in millions72.9	72.9	72.9
EBITDA18.3	21.6	57.9
EBITA15.9	19.1	50.5
EBIT11.8	14.7	38.1
Average no. of employees(full-time equivalent)1,884	1,925	1,896

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Quarterly Report III/2003 of TAKKT AG

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Segment Information (in EUR million)

01.01. – 30.09.2003K+KEUROPATurnover264.2EBITDA43.6EBITA40.0EBIT35.0Profit before tax30.8Profit after tax before minorityinterests19.7Average no. of employees(full-time equivalent)866Employees (full-time equiva-lent)at 30.09.2003857	Topdeq51.8- 1.3- 2.8- 3.8- 4.2- 3.8226226	K+KAmerica 216.1 20.8 18.7 12.3 6.0 3.5 778 779	Other 0.0 - 5.2 - 5.4 - 5.4 - 4.8 - 2.6 26 26

01.01. – 30.09.2002K+KEUROPATurnover273.2EBITDA44.5EBITA40.3EBIT35.3Profit before tax30.5Profit after tax before minorityinterests19.7Average no. of employees(full-time equivalent)888Employees (full-time equiva-lent)at 30.09.2002880	Topdeq57.10.4- 0.7- 1.8- 2.6- 3.2235236	K+KAmerica 259.9 25.2 22.7 15.1 6.1 3.4 791 779	Other 0.0 - 5.7 - 5.7 - 5.7 - 4.8 - 3.2 27 26

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Quarterly Report III/2003 of TAKKT AG

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Consolidated Statement of Changes in Shareholders' Equity

(in EUR million)

SharecapitalBalance at 01.01.200372.9Currency translation differ-ences0.0Dividend0.0Other changes0.0Net income for theperiod0.0Changes in derivative financialinstruments0.0Balance at 30.09.200372.9	Capitalreserves0.00.00.00.00.00.00.0	Generalreserves 83.9 - 7.5 - 7.3 0.0 16.3 0.0 85.4	Othercompre-hensiveincome - 7.2 0.7 0.0 0.0 0.0 1.8 - 4.7

SharecapitalBalance at 01.01.200272.9Currency translation differ-ences0.0Dividend0.0Other changes0.0Net income for theperiod0.0Changes in derivative financialinstruments0.0Balance at 30.09.200272.9	Capitalreserves0.00.00.00.00.00.00.0	Generalreserves 80.8 - 8.7 - 7.3 0.0 16.2 0.0 81.0	Othercompre-hensiveincome - 5.3 0.5 0.0 0.0 0.0 - 3.1 - 7.9

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Consolidated Cash Flow Statement

(in EUR million)

	01.01.2003 -	01.01.2002 -
	30.09.2003-	30.09.2002-
Net income(incl. minorityinterests)	16.8	16.7
Fixed asset depreciation	19.8	21.5
	36.6	38.2
Change inprovisions	2.7	2.2
Other income / expenditure not affectingthe movement of funds	- 0.6	- 0.7
Profit / loss on disposal of fixed assets	- 0.2	0.0
Change in stocks	1.2	- 5.6
Change in trade debtors and other assets not part of investing and
financingactivities	- 3.8	- 1.8
Change in trade liabilities and other liabilities not part of investing
and financingactivities	- 1.3	3.5
Net cash flow from operating activities	34.6	35.8
Proceeds from disposal of tangible and intangible assets	0.5	0.3
Investment in tangible and intangible assets	- 7.5	- 7.5
Net cash flow from investing activities	- 7.0	- 7.2
Change ingross borrowings	- 18.7	- 17.1
Dividends togroupshareholders and minorityinterests	- 8.2	- 8.2
Other changes in shareholders’ equity	0.2	- 0.1
Net cash flow in financing activities	- 26.7	- 25.4
Net change in funds	0.9	3.2
Effects of exchange rate changes	- 0.2	- 0.1
Funds at beginningofperiod	5.5	4.0
Funds at end ofperiod	6.2	7.1

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Quarterly Report III/2003 of TAKKT AG

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Consolidated Balance Sheet

(in EUR million)

ASSETS	30.09.2003249.15.173.60.1327.956.190.16.2152.49.614.1504.0
Fixed assets
Goodwill
Other intangible assets
Tangible assets
Financial assets
Current assets
Stocks
Trade and other debtors
Cash and cash equivalents
Deferred taxesPrepaid expenses
EQUITY AND LIABILITIES	30.09.200372.969.1- 4.716.3153.63.231.2257.458.6504.0
Shareholders’ equity
Issued capital
General reserves
Other comprehensive income
Retained earnings
Minority interest
Provisions
**Short and long-term borrowings **
Trade and other liabilities

» This quarterly report was prepared according to the International Financial Reporting Standards (IFRS). The same accounting principles as set out in the annual report 2002 (page 79 et seqq.) were applied.

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Chairman of the Supervisory Board: Günther Hülse

Management Board: Georg Gayer (Chairman) Alfred Michael Milanello Franz Vogel Dr. Felix A. Zimmermann

Headquarters: Stuttgart HRB 19962

TAKKT AG

Finance / Investor Relations Presselstrasse 12 70191 Stuttgart Germany

Tel. +49 (0)711 3 46 58-2 22 Fax +49 (0)711 3 46 58-1 04 investor@takkt.de

www.takkt.de

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