STUTTGART (dpa-AFX) - In view of the sluggish economic environment, office furniture retailer Takkt expects a decline in organic sales in 2024. After a weak start, growth is expected to improve from quarter to quarter, but organic sales are still likely to fall "in the high single-digit to low double-digit percentage range", said CFO Lars Bolscho in a statement on Thursday. The fact that business is expected to pick up again in the coming years could hardly lift investor sentiment. The share price fell, erasing its gains for the year to date.

The share lost 2.5 percent to 13.42 euros. This means that investors have again suffered a slight loss in the current year. Takkt is currently worth around 875 million euros on the stock exchange and is therefore in the middle of the small cap index SDax.

Adjusted for one-off costs, earnings before interest, taxes, depreciation and amortization (EBITDA) for the Stuttgart-based company are expected to be 8.0 to 9.5 percent of sales. The company is continuing to put the brakes on costs. Last year, the margin of 9.0 percent was almost one percentage point lower than in 2022.

The cost base is to be reduced by at least 15 million euros through adjustments to other costs and personnel. However, this will initially be accompanied by expenses that will put pressure on profits. The company then intends to return to growth from 2025. The aim for the coming years is to accelerate organic growth and improve the operating profit margin to 12%.

"We are on the right track and are confirming our strategy, which we are constantly sharpening and adapting to changing conditions during the multi-year transformation process," said CEO Maria Zesch. However, the company said that its own measures were being overshadowed by high interest rates, increased costs and a reluctance to invest.

Economic forecasts for 2024 assume that momentum in Europe will once again be weak and that the pace of growth in the USA will slow. The mood in the economy continues to point to a challenging environment. "In this environment, we started the new year in a very similar way to how the old one ended," said CFO Bolscho. Demand remains very subdued.

As has been known since mid-February, the company generated lower turnover and operating profit in 2023 due to weak demand. Turnover fell by a good 7 percent to 1.24 billion euros. Earnings before interest, taxes, depreciation and amortization fell from a good 132 million euros to just under 112 million euros. At 24.6 million euros, profit was less than half of the previous year's figure. As already announced, the dividend is to remain stable at one euro per share./men/nas/jha/