Delticom AG

EANS-News: Delticom AG: 2011 on track so far, Q4 off to a good start

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9-month report


Hanover (euro adhoc) - 18 October 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 first nine months of the
current year. In the first nine months the company was able to increase its
revenues by 15.8% to EUR 297.7 million and the EBIT by 23.3% to EUR 28.2
million, despite the strong prior-year base. The winter tyre season has started
off well.


Revenues

Good summer tyre sales and an early start in the winter tyre season helped third
quarter revenues to grow substantially year-on-year. It shows that winter tyres
are increasingly in demand, not only in the countries where car drivers
traditionally change over from summer to winter tyres but also elsewhere in
Europe.

In the third quarter, Delticom was able to generate revenues of EUR 99.4 million
(Q310: EUR 79.7 million) - a plus of 24.7%, in spite of the previous year's
strong base. As a result, year-to-date revenues amounted to EUR 297.7 million
(9M10: EUR 257.0 million, +15.8%). Q3 revenues in the E-Commerce division were
up year-on-year by 18.4% to EUR 89.1 million (9M11: +14.0% to EUR 279.2
million). The quarterly revenues of the Wholesale division grew by to EUR 10.3
million, after prior-year revenues of EUR 4.4 million (9M11: EUR 18.5 million,
+53.2%).


Gross margin

In the reporting period the cost of goods sold totalled EUR 218.6 million period
(9M10: EUR 187.3 million, +16.7%). EUR 73.7 million were recognised in the third
quarter (Q310: EUR 57.8 million, +27.4%).

Initially, the summer tyre business had lagged behind expectations until Q2.
Starting from August, though, market-wide demand for summer tyre sales
strengthened. In the course of the third quarter winter tyre sales stepped up
noticeably. This presented Delticom with the opportunity to grow volume with
better prices. As a result, Q3 gross margin (trade margin ex other operating
expenses) was taken down from previous quarter's 27.7% to 25.8%. Q3 gross margin
was also lower than in the prior-year period (Q310: 27.4%, -1.6%p). The main
reason for this development has been the strong ramp-up of inventories. This
year Delticom has enough stock to offer more tyres at better prices, to win more
customers.

For the full nine months the gross margin amounted to 26.6% or -0.6%p
year-on-year (9M10: 27.1%).


Personnel expenses

In the reporting period an average of 111 staff members were employed at
Delticom (9M10: 99). Personnel expenses for Q311 were EUR 1.7 million (Q310: EUR
1.6 million), for the nine months in total EUR 5.2 million (9M10: EUR 4.7
million). Compared to the prior-year period, the personnel expenses ratio (staff
expenditures as percentage of revenues) for the reporting period came down
slightly from 1.8% to 1.7%.


Other operating expenses

In Q311 other operating expenses totalled EUR 16.7 million, an increase of 18.1%
over the prior-year value of EUR 14.1 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. In line
with the higher volume in Q311 the quarterly transportation costs increased by
22.7%, from EUR 6.5 million to EUR 8.0 million. Due to higher selling prices the
ratio of transportation costs in relation to revenues came down slightly to 8.0%
(Q310: 8.2%).

Marketing expenses in Q311 amounted to EUR 1.9 million after EUR 1.7 million in
Q310, an increase of just 9.2%. As a result, marketing in percent of revenues
decreased substantially from 2.2% to 1.9%.


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 82.2%, from EUR 0.3 million in Q310 to EUR 0.6 million. For the
nine months the total amount was EUR 1.4 million (9M10: EUR 0.9 million,
+51.1%). The low absolute level of depreciation underlines the low capital
intensity of Delticom's business.


Earnings performance

Q311 Earnings before interest and taxes (EBIT) improved by 51.5% to EUR 9.5
million (Q310: EUR 6.3 million). This translates into an EBIT margin (EBIT in
percent of revenues) of 9.5% (Q310: 7.9%). The EBIT for the total nine months
came in at EUR 28.2 million (9M10: EUR 22.9 million), a plus of 23.3% and an
EBIT margin of 9.5% (9M10: 8.9%).

In line with the softer gross margin, however, the Q311 EBIT margin adjusted for
FX income and losses (8.5%) would have been lower than in the prior-year period
(Q310 adjusted: 9.7%). For the full nine months the adjusted EBIT margin would
have been 9.2% flat year-on-year.


Inventories and liquidity position

Delticom opened a new large-scale warehouse in the second quarter. Back by this
additional capacity the inventory value moved up to EUR 122.9 million towards
the end of the third quarter (30.09.2010: EUR 76.5 million, 31.12.2010: EUR 52.2
million). As a result the net working capital increased to EUR 42.5 million
(30.09.2010: EUR 25.8 million, 31.12.2010: EUR 1.8 million). In line with the
higher stock levels Delticom had to invest into additional racks, forklifts and
packaging machines. The investments into property, plant and equipment were EUR
8.0 million year-to-date (9M10: EUR 1.9 million).

As of 30.09.2011 the cash and cash equivalents stood at EUR 11.7 million
(30.09.2010: EUR 23.3 million, 31.12.2010: EUR 66.8 million). The company´s net
cash position amounted to EUR 1.8 million (cash less interest-bearing
liabilities, 9M10: EUR 24.3 million).

Rainer Binder (CEO): "We are pleased with the course of business so far.
Obviously last year's spectacular winter has raised the bar for the closing
quarter. Despite this, we want to beat last year's winter tyre sales, even with
less winterly weather conditions." Although the market for winter tyres from
certain brands and dimensions might tighten yet again, prices and margins will
most likely not rise as much as last year.

Frank Schuhardt (CFO) adds: "For the remaining months we do not target the
extraordinarily high prior-year margins, but rather want to gain additional
market share. Assuming a normal course of business our plan is unchanged: a
revenue growth of 10%, at an EBIT margin of around one percentage point lower
than in 2010."

The full report for the first nine months of 2011 will be published on 08
November 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 40 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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