Delticom AG

EANS-News: Delticom publishes preliminary figures for FY 2011


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Financial Figures/Balance Sheet


Hanover (euro adhoc) - 19 January 2012 - For Delticom (German Securities Code
(WKN) 514680, ISIN DE0005146807, stock market symbol DEX), Europe's leading
online tyre dealer, 2011 was again a successful year. According to today's
preliminary figures, revenues in the fiscal year increased by 14.4% to EUR 480.0
million and EBIT by 9.6% to EUR 52.2 million. Earnings per share grew 8.4% to
EUR 2.99.


Q411: Successful quarter despite mild winter

The harsh 2010 winter had resulted in a superior business performance for the
European tyre trade. Last season, though, the business was hurt by very mild
winter weather conditions. At present, industry experts believe that winter tyre
sales have dropped substantially below prior-year levels.

After taking the new warehouse into operations in Q211, Delticom stocked up
ahead of the season. As a result, the company was able to offer attractive
prices to its customers throughout the fourth quarter. Despite the very strong
base, Delticom sold more tyres than in Q410. Quarterly revenues increased by
12.1% to EUR 182.3 million (Q410: EUR 162.6 million).

While the 2010 winter had seen massive price hikes driven by market-wide
scarcities, Q411 prices developed in a more orderly fashion, as expected.
Consequently, gross margin (trade margin ex other operating expenses) retracted
to a less inflated 28.4% (Q410: 30.6%). The Q411 EBIT margin came in at 13.2%
(Q410: 15.2%).


Fiscal year 2011

Revenues

Over the course of the year, selling prices developed favourably, the mix was
stable and volumes were fairly satisfactory. All in all, Delticom was able to
generate revenues of EUR 480.0 million, a plus of 14.4% from prior-year's EUR
419.6 million. Revenues in the E-Commerce division were up year-on-year by
12.9%, from EUR 403.7 million to EUR 455.6 million. The revenues of the
Wholesale division lifted by 53.4% to EUR 24.4 million, after prior-year
revenues of EUR 15.9 million.


Gross margin

The cost of goods sold increased in the reporting period by 16.3%, from EUR
300.1 million in 2010 to EUR 349.1 million. Delticom generated 2011 a greater
share of revenues with own inventories, compared to the previous years. In an
environment of rising purchasing prices, the company was therefore able to
cushion the hikes by early purchasing to a good extent. Thanks to the increased
volume Delticom also benefited from economies of scale in the procurement
function. Still, the full-year gross margin came down from 28.5% to 27.3%,
primarily due to the closing winter quarter.


Personnel expenses

Thanks to the highly efficient operating workflows, the company has been able to
keep staff levels low in 2011 despite increasing transaction volumes. In the
reporting period on average 116 staff members were employed at Delticom
(previous year: 101). Personnel expenses amounted to EUR 7.2 million (previous
year: EUR 6.8 million). Compared to the prior-year period, the personnel
expenses ratio (staff expenditures as percentage of revenues) came down slightly
from 1.6% to 1.5%.


Other operating expenses

Overall the other operating expenses totalled EUR 77.7 million in the past
financial year, an increase of 11.8% over the prior-year value of EUR 69.5
million.

Among the other operating expenses, transportation costs is the largest line
item. It grew in line with the increase in business volume, from EUR 34.5
million by +8.5% to EUR 37.5 million. The share of transportation costs against
revenues declined from 8.2% in 2010 to 7.8% in 2011. The reason for this was the
significant price effect in the revenues for the last financial year. In
addition, economies of scale arising from the centralised warehouse
infrastructure helped to further drive down costs.

In the reporting period, costs for advertising totalled EUR 9.9 million, after
EUR 9.0 million in 2010. This represents a marketing expense ratio (marketing
expenses as a percentage of revenues) of 2.1%, flat year-on-year.


Depreciation

In line with our gradual warehouse capacity expansion and the parallel
investments into warehousing infrastructure, depreciation rose by 62.3% from EUR
1.3 million in 2010 to EUR 2.1 million. The low absolute level of depreciation
underlines the low capital intensity of Delticom's business.


Earnings performance

EBIT improved from EUR 47.6 million by 9.6% to EUR 52.2 million. Due to the
extraordinarily margin-strong closing quarter 2010, the management had expected
a deterioration of year-on-year profitability for 2011. In the end, the EBIT
margin showed only minor decline from 11.3% to 10.9%. The continually low Euro
money market rates led to flat financial income of EUR 0.1 million. This was
balanced by almost the same amount of financial expenses arising from provisions
as well as interest costs for the short-term utilisation of credit lines.

The expenditure for income taxes was EUR 16.8 million (previous year: EUR 15.1
million). The tax rate was 32.2% (2010: 31.6%). Consolidated net income for 2011
grew from EUR 32.6 million to EUR 35.4 million. This corresponds to earnings per
share (EPS) of EUR 2.99 (undiluted, 2010: EUR 2.76), a step-up of 8.4%.


Working capital

From an exceptionally low prior-year base of EUR 52.2 million which was affected
by market-wide shortages, inventories in 2011 increased to EUR 106.5 million. As
of 31.12.2011 this equates to 64.0% of the total assets of EUR 166.5 million.
The company is well positioned for the upcoming summer business. Accounts
payable grew at lower rate of 29.0% year-on-year, from EUR 53.6 million to EUR
69.1 million. Delticom management intends to continue its policy to pay off a
significant part of the liabilities ahead of schedule. Taken together with
accounts receivable of EUR 10.1 million (31.12.2010: EUR 10.9 million), the net
working capital amounted to EUR 43.6 million at year-end (31.12.2010: EUR 1.8
million).


Cash flow and liquidity position

Due to more funds being tied up in working capital, the operating cash flow from
ordinary business activities was EUR -9.6 million (2010: EUR 51.7 million). In
2011 Delticom made investments of EUR 8.4 million into property, plant and
equipment, most of it into the infrastructure of the new warehouse, which was
taken into operations in Q2. With a year-end liquidity of EUR 22.2 million
(31.12.2010: EUR 67.8 million) and access to currently unused credit lines, the
company has enough funds to grow the business in the months ahead.


Outlook

Over the preceding months, economists have gradually revised growth estimates
for Europe. The general expectation is that austerity measures and rising
unemployment is going to depress consumer sentiment further. Industry experts
believe that the European tyre trade will not remain unaffected.

Independent of those short-term developments, the share of online sales in the
tyre market continues to be comparatively low. More and more drivers are turning
to the Internet in search of lower-priced alternatives. Delticom as the leading
online tyre dealer will be able to capitalise on this trend. Even for a scenario
where market and weather do not improve over 2011, Delticom management regards a
revenue growth of 10% as achievable. Assuming margins at prior-year levels,
earnings should grow in line with revenues.

The full report for the fiscal year 2011 will be published on 22 March 2012
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 41 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
30,000 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: free trade: Berlin, München, Düsseldorf, Stuttgart, regulated
             dealing/prime standard: Frankfurt 
language:   English
 

 

 



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