Delticom AG

EANS-News: Delticom AG: Q2 revenues and earnings on track

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6-month report


Hanover (euro adhoc) - Hanover, 19 July 2011 - Delticom (German Securities Code
(WKN) 514680, ISIN DE0005146807, stock market symbol DEX), Europe's leading
online tyre dealer, has published preliminary figures for the second quarter of
2011. Over the past months the company was able to increase its revenues and
earnings, despite the strong prior-year base. With its new central warehouse,
Delticom is well prepared for the coming quarters.

The European summer tyre trade has lagged behind expectations so far. At
Delticom, positive figures in May barely managed to offset a comparatively weak
April. However, tyre sales have gone up again noticeably year-on-year since
June.


Revenues

In the second quarter, Delticom was able to generate revenues of EUR 112.9
million (Q210: EUR 102.9 million) - a plus of 9.8%, in spite of the previous
year's strong base. As a result, year-to-date revenues amounted to EUR 198.3
million (H110: EUR 177.3 million, +11.8%). H1 revenues in the E-Commerce
division were up year-on-year by 12.0%, from EUR 169.7 million to EUR 190.1
million. The revenues of the Wholesale division grew by 7.3% to EUR 8.2 million,
after prior-year revenues of EUR 7.6 million. In the same period, other
operating income decreased by 7.7% to EUR 3.1 million (H110: EUR 3.4 million).


Gross profit 

The cost of sales in the reporting period totalled EUR 144.5 million (H110: EUR
129.3 million, +11.7%), thereof EUR 81.5 million for the second quarter (Q210:
EUR 74.5 million, +9.4%). In the first six months of 2011 the gross profit
advanced by 10.8% year-on-year, from EUR 51.4 million to EUR 56.9 million.
Despite a challenging Pan-European demand situation, the rise in purchasing
prices were largely passed on to customers. Consequently, second quarter gross
profit margin (gross profit in relation to total income) came in flat
year-on-year at 29.0%. For the first half of the year the gross profit margin
decreased only slightly from 28.4% to 28.3%.


Personnel expenses

In the reporting period an average of 108 staff members were employed at
Delticom (H110: 96). Personnel expenses amounted to EUR 3.5 million (previous
year: EUR 3.2 million). Compared to the prior-year period, the personnel
expenses ratio (staff expenditures as percentage of revenues) remained unchanged
at 1.8%.


Other operating expenses

Overall the other operating expenses in H111 totalled EUR 33.5 million, an
increase of EUR 2.6 million or 8.5% over the prior-year value of EUR 30.9
million.

Among the other operating expenses, transportation costs is the largest line
item. Tyres sold online are picked up at the delivery points by parcel services
which then transport the tyres to the customers or service partners.
Transportation costs registered only a rather small step-up in the reporting
period, from EUR 15.8 million to EUR 16.2 million (+2.2%). Because
transportation volumes in the second quarter were only slightly higher than last
year's, quarterly transportation costs remained flat year-on-year at EUR 9.4
million. Regarding the first six months as a whole, the share of transportation
costs against revenues decreased from 8.9% to 8.2%, partly driven by relatively
stronger revenue growth coming from higher selling prices.

Marketing expenses in Q211 amounted to EUR 2.0 million after EUR 1.9 million in
Q210, an increase of just 4.1%. As a result, marketing in percent of revenues
came down slightly, from 1.8% to 1.7%.


Depreciation 

In line with the significant expansion of warehouse capacity and the parallel
investments into warehousing infrastructure, scheduled depreciation for the past
quarter rose by 42.3%, from EUR 0.3 million in Q210 to EUR 0.4 million. For the
first half of the year the total amount was EUR 0.8 million (H110: EUR 0.6
million, +33.7%). The low absolute level of depreciation underlines the low
capital intensity of Delticom's business.


Earnings performance

Last year's second quarter earnings before interest and taxes (EBIT) had shown a
steep rise by +43.9% to EUR 10.9 million. Nevertheless, against the backdrop of
a stable gross profit margin, EBIT for this year's Q2 saw a year-on-year
increase once again, by 19.6% to EUR 13.0 million. This translated to a
quarterly EBIT margin of 11.5% (Q210: 10.6%). The EBIT for the total H111 came
in at EUR 19.1 million (H110: EUR 16.7 million), a plus of 14.4% and an EBIT
margin of 9.7% (H110: 9.4%).


Inventories and liquidity position

Delticom opened a new large-scale warehouse in the second quarter. Following the
accelerated buildup of stock levels to EUR 103.2 million (31.12.2010: EUR 51.7
million), net working capital increased to EUR 44.3 million (31.12.2010: EUR 1.3
million). Consequently, cash flow from ordinary business activities (operating
cash flow) for the period under review came in significantly lower than last
year, at EUR -24.9 million (H110: EUR 3.5 million). Taking the cash dividend of
EUR 32.2 million for 2010 into account, cash and cash equivalents as of
30.06.2011 totalled EUR 6.1 million (30.06.2010: EUR 21.8 million, 31.12.2010:
EUR 66.8 million). The company´s net cash position (cash and cash equivalents
less liabilities from current accounts) amounted to EUR 0.9 million.


Frank Schuhardt (CFO): "Our new warehouse has allowed us to stock up for the
upcoming months more aggressively than originally envisioned. Compared to last
year, we are now in a better position to offer our customers attractively priced
tyres throughout the entire winter." Despite the strong prior-year base,
Delticom´s management expects to increase both sales volume and revenues in the
fourth quarter, assuming normal winter weather conditions. Frank Schuhardt adds:
"We remain on track. Our plans call for around 10% revenue growth in 2011 and an
EBIT margin of around one percentage point lower than in 2010."

The full report for the first six months of 2011 will be published on 09 August
2011 within the "Investor Relations" section of the website www.delti.com .


Company profile:

Delticom, Europe's leading online tyre retailer, was founded in Hanover in 1999.
With more than 100 online shops in 39 countries, the company offers its private
and business customers an unequalled assortment of excellently priced car tyres,
motorcycle tyres, bicycle tyres, truck tyres, bus tyres, special tyres, rims,
complete wheels (pre-mounted tyres on rims), selected replacement car parts and
accessories, motor oil and batteries. The independent website reifentest.com
contains impartial information about tyre tests and helps the customers choose
from more than 100 tyre brands and more than 25,000 tyre models. Delticom
delivers either directly to the customer's home address, or to one of more than
29,000 service partners - affiliated garages which take delivery of tyres and
then install these on the customer's vehicle. Delticom's Wholesale division also
sells tyres to wholesalers domestically and abroad.

On the Internet at: www.delti.com
Selected online shops: www.reifendirekt.de, www.123pneus.fr, www.mytyres.co.uk,
www.reifendirekt.ch


Further inquiry note:
Delticom AG Investor Relations
Melanie Gereke
Brühlstraße 11
30169 Hannover
Tel.: +49 (0)511-936 34-8903
Fax:  +49 (0)89-208081147
e-mail: melanie.gereke@delti.com

end of announcement                               euro adhoc 
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company:     Delticom AG
             Brühlstraße 11
             D-30169 Hannover
phone:       +49 (0)511 93634 8903
FAX:         +49 (0)511 336116 55
mail:     info@delti.com
WWW:      http://www.delti.com
sector:      Electronic Commerce
ISIN:        DE0005146807
indexes:     SDAX, CDAX, Classic All Share, Prime All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
             Stuttgart, Düsseldorf, München 
language:   English
 



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